As residents of the Dallas area continue to reel from rising sale prices for single-family homes, some are pursuing a more attractive alternative: single-family home rentals. But a new study indicates that even those are getting more expensive.
In the Dallas-Plano-Irving area, rents for single-family homes rose 2.5 percent from April 2018 to April 2019, according to the study, produced by CoreLogic.
“While the housing market is cooling, home prices remain high in some of the nation’s top metros. This may be contributing to the growing rental demand, as many potential buyers are being priced out of the market,” Molly Boesel, principal economist at CoreLogic, says in a release.
CoreLogic analyzed changes in single-family rents across the United States as a whole and in 20 metro areas, including Dallas. In Austin, single-family rental rates grew 3.5 percent from April 2018 to April 2019, according to CoreLogic, while the growth rate was 1.2 percent in the Houston area. San Antonio was not included in the study.
Although percentage increases for April 2019 were available, the dollar amounts for single-family rents were not. Dollar amounts for March 2019, however, were available. In the Dallas area, the median rent for a three-bedroom, single-family home was $1,622 in March, according to CoreLogic, more expensive than Austin ($1,548) and Houston ($1,408).
Among the 20 metro areas examined by CoreLogic, Phoenix posted the highest year-over-year increase in rents for single-family homes — 6.9 percent.
CoreLogic, a provider of property data, services, and technology, says low inventories of single-family home rentals are driving up rental rates around the country. “Metro areas with limited new construction, low rental vacancies, and strong local economies that attract new employees tend to have stronger rent growth,” the company says.
The MetroTex Association of Realtors, which tracks North Texas housing market statistics, recently reported that the median price of a single-family home in Dallas County was $260,000 in May 2019, a 2 percent increase from May 2018. Across the nine-county North Texas area, the median price of a single-family home reached $270,000 in May, up 3 percent from the same time in 2018, MetroTex says.
Amid that atmosphere, some residents of the Dallas area are turning to single-family home rentals, because those require less of an upfront financial commitment than home purchases. One reason? When you rent a home, there’s no down payment (a 20 percent down payment equates to around $52,000 for the median-priced home in the Dallas area). Another reason? Buying a home normally results in thousands of dollars in mortgage-related fees.