Is it best to rent or buy? According to a new report from Zillow, more local renters are considering homeownership due to the rising costs of rents around Dallas-Fort Worth.
Although more apartment buildings are going up, resulting in a slower appreciation of rental prices, actual rents are still trending upward: 5.3 percent higher in Dallas-Fort Worth compared to this time last year, according to local figures provided by Zillow. (Nationally, rents have gone up 4.5 percent.) The increase is more pronounced in single-family homes as opposed to multifamily buildings.
As for home values, those have increased 4.3 percent nationwide in the past year, but here in Dallas-Fort Worth, they have skyrocketed by 15.2 percent — the second highest percentage increase in the country. However, despite that jump, the median home price is still a relatively affordable $174,400.
For context, the city with the highest percentage increase in home values is Denver, where they are up 16.2 percent. The median home price there is $316,200, and Denver rents have gone up 11 percent since this time last year.
So because paying a mortgage in Dallas-Fort Worth now seems to offer more stability than renting, more qualified renters are taking the plunge into homeownership.
“Rental appreciation has started to slow down in part due to more rental supply,” said Zillow Chief Economist Dr. Svenja Gudell in a release. “But make no mistake: Despite this recent slowdown in rental appreciation, the rental affordability crisis we’ve been enduring for the past few years shows no signs of easing, especially as income growth remains weak.
“It will take a lot more supply, and a lot more renters-turned-homeowners, to fully reverse this trend.”
With home values expected to increase by an additional 5 percent or more in the next year and a possible rise in interest rates imminent, the trend toward buying over renting may continue, especially because rents, although slower to rise these days, will keep going up — and faster than incomes.
