Published December 2017
With Texas’ population growing by roughly 1,200 people per day, you may wonder – where are all those newcomers living? In rental housing, most likely.
Dr. Jim Gaines
Chief Economist
Texas A&M Real Estate Center
According to a recent Census Bureau report on “predominately renter” cities, College Station is at number one nationally, with nearly 60 percent of its residents in rental housing. Killeen ranks third at 56 percent.
“Texas is a young state in terms of demographics,” says Dr. Jim Gaines, chief economist at Texas A&M Real Estate Center. “During the last five to six years, a record number of young people have moved here looking for work. More than 50 percent of the state’s population is 34 years old or younger.”
And that means more renters. But not all of them are seeking employment.
“Any city with a large university or major military presence will have a large percentage of renters,” Gaines says. College Station, of course, is home to Texas A&M, with more than 62,000 students. In Killeen, 67 percent of residents are affiliated with Fort Hood, the world’s most populous U.S. military installation.
Across the nation, 2015 saw the largest percentage of renter households since the 1960s — 34.4 percent, according to a recent report by Harvard University’s Joint Center for Housing Studies. And when the rental market share grows, homeownership levels fall. A Pew Research Center analysis of Census and mortgage loan data indicates falling homeownership level is particularly evident among young adults, minorities and those in the lower income brackets.
While foreclosure rates have declined since the Great Recession, the current falloff in homeownership includes a combination of rising home prices and lending constraints. Many would-be homeowners are simply priced out of the market.
“Homes selling for under $200,000 are hard to find,” Gaines says. “Investors, both individual and institutional, are grabbing them, often for cash, before the owner-buyer has a chance. And mortgage credit remains tight for households with less than stellar credit scores and those with low incomes, limiting access to homes selling for under $400,000.”
In some regions, particularly areas in Austin, Dallas-Fort Worth and Houston, the effects of rising home prices have spread to the rental market, forcing existing residents, both homeowners and apartment dwellers, to relocate to outlying areas. The trend is expected to continue. FN
I am an expert in real estate economics and housing market trends, with a deep understanding of the factors influencing rental markets and homeownership levels. My expertise is demonstrated by my in-depth knowledge of the concepts discussed in the article published in December 2017, which revolves around the dynamics of Texas' housing market, population growth, and the increasing trend of renting over homeownership.
The article begins by highlighting the significant population growth in Texas, approximately 1,200 people per day, and addresses the question of where the newcomers are living. The primary focus is on rental housing, with data from a Census Bureau report ranking College Station as the number one "predominately renter" city nationally, with nearly 60 percent of its residents in rental housing. Killeen follows closely at third place with 56 percent.
Dr. Jim Gaines, Chief Economist at Texas A&M Real Estate Center, is cited throughout the article, providing expert commentary on the demographic trends in Texas. He points out that Texas has a youthful population, with more than 50 percent of the state's residents being 34 years old or younger. This demographic composition has led to a surge in renters, driven in part by young people moving to Texas for employment opportunities.
The article identifies key factors contributing to high rental percentages in certain cities. Cities with a significant university or a major military presence, such as College Station and Killeen, have a higher percentage of renters. College Station, home to Texas A&M, has a large student population, while Killeen has a strong affiliation with Fort Hood, the world's most populous U.S. military installation.
A broader national trend is discussed, citing a report by Harvard University's Joint Center for Housing Studies from 2015, which noted the largest percentage of renter households since the 1960s, accounting for 34.4 percent of households. The increase in the rental market share is shown to correspond with a decline in homeownership levels, particularly among young adults, minorities, and those in lower income brackets.
The article also touches upon the challenges faced by potential homebuyers, including rising home prices and lending constraints. Dr. Gaines emphasizes the scarcity of homes selling for under $200,000, with investors quickly acquiring them, often in cash transactions. Additionally, mortgage credit remains tight for households with less-than-stellar credit scores and low incomes, limiting access to homes selling for under $400,000.
In some regions, such as Austin, Dallas-Fort Worth, and Houston, the article notes the ripple effects of rising home prices extending to the rental market. This phenomenon is causing existing residents, both homeowners and apartment dwellers, to relocate to outlying areas, and this trend is expected to persist.
In summary, my expertise in real estate economics allows me to provide a comprehensive understanding of the concepts discussed in the article, ranging from demographic trends and the influence of universities and military installations on rental percentages to the challenges faced by potential homebuyers in a dynamic and evolving housing market.
