Rising Rental Costs Make Purchasing a North Texas Home More Appealing

Throughout the country, rental costs have been on the rise. This increase in costs was fueled by the Great Recession of 2008 after many homeowners found themselves unable to pay their home mortgages. As homeowners lost their homes and turned to rentals, the demand for rental homes and apartments skyrocketed. While the market has started to stabilize in many areas, the demand for rentals continues to remain high. As a result, rental costs are still high throughout the nation as well as in the Dallas-Fort Worth region. Unfortunately, there does not appear to be any relief in sight for those who might be interested in finding a rental in North Texas.

Affordable Rentals are Difficult to Find in the Dallas-Fort Worth Region

Like the rest of the country, the demand for rentals is high in the Dallas-Fort Worth region for many reasons. Among these are the fact that many people are still wary about the housing market. Therefore, they choose to continue to rent rather than to buy. Furthermore, many of those who wish to buy are struggling with saving the money necessary for a down payment. In the Dallas-Fort Worth metro area, the problem is further fueled by the fact that the number of jobs available in the area is on the rise. As employment opportunities increase, so does the demand for rentals near to area employers. Obviously, an increase in employment opportunities is a good thing for area residents, but the rising rental costs is an unfortunate side effect that is making it difficult to find affordable housing.

According to recent data, renters within the Dallas-Fort Worth metro area spend 29 percent of their income on rent. This is 8 percent higher than what renters have historically had to pay toward their homes. Furthermore, rental costs appear to be rising quickly in the North Texas region. Zillow Rent Index reports that the average monthly rental rate increased by 5.5 percent in one year to $1,465 in April. This is faster than the national rate, which increased by four percent to $1,364 per month.

Incomes Fall Short of Rental Increases

To further complicate the rising rent issue, income has not increased at the same rate as rental costs. With incomes failing to match the pace of rent increases, it is becoming increasingly difficult for potential home buyers to save money for a down payment. As a result, many housing markets have an abundance of entry-level homes on the market with no available buyers while simultaneously failing to have enough houses on the market for high-end buyers.

Unfortunately, there does not appear to be a break to this cycle within the next few years. In fact, most experts predict that rent costs will continue to climb for the next two to three years. This is particularly true for Dallas where rental rates are linked to increases in land value. In an effort to recoup their costs, many developers are choosing to build luxury apartments with high rental rates.

Ironically, many renters could save a significant amount of money each month if they purchased a home. With the average home price in the Dallas-Fort Worth region being $159,000, the estimated monthly mortgage rate would be just $592.

Are you looking to give up the rental life for a Dallas home of your own? If so, give our team of knowledgeable property experts a call today.

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