Recent data and reports from the Texas Office of the State Demographer and the U.S. Census Bureau pointed to the Greater Houston metro as being the top area nationally for population gain and the top in Texas for domestic migration, but things have changed since the data used for the report was taken.
Focusing on the periods of July 2014 to July 2015 and 2009 to 2013, the report has been challenged by more up-to-date resident and job growth predictions, which indicate that population expansion is slowing in what was once considered the nation’s fastest growing metro.
Forbes recently left Houston off its list of 20 fastest growing markets for 2016; one factor likely to slow population expansion is job growth. Houston is expected to add only 22,000 this year, according to the Greater Houston Partnership.
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Population fluctuation effects housing
Spanning July 2014 to July 2015, the Houston metro added roughly 159,000 people — the largest gain of any metro in the nation, according to the report from the Census Bureau. Harris County accounted for a high percentage of this growth, as the area added more than 90,000 people. During the same period, Fort Bend County saw its population rise by 4.3 percent to more than 716,000 residents.
[graphiq id=”3tIPS7nQYWV” title=”Houston Public School Ratings vs. Home Sale Prices” width=”600″ height=”621″ url=”https://w.graphiq.com/w/3tIPS7nQYWV” link=”http://places.findthehome.com/l/94729/Houston-TX” link_text=”Houston Public School Ratings vs. Home Sale Prices | FindTheHome”]
The population growth that occurred metrowide during this period created a need for more new homes, along with an expected need for rental units. While Houston will lead the nation in terms of new single-family housing at the start of this year, activity is expected to be down soon.
According to Scott Davis, director of Metrostudy’s Houston region, the current environments challenging for new homebuilders in the last several years with construction costs and affordability remaining primary issues.
Past years of population growth have caused a sizable wave of multifamily construction within the metro area — an estimated 18,000 to 20,000 units — which has lead some analysts to suggest Houston’s rental sector is entering overbuilt status.
Some predictions call for only half of these delivered units to be absorbed. The Inner Loop represents the market with the most multifamily deliveries, at 26, slated for this year. The Woodlands/Conroe, Galleria and Energy Corridor/Katy markets all have upwards of 16 multifamily deliveries expected for 2016.
Buying vs. renting
According to Zillow, it is cheaper overall to own a home in Houston than it is to rent. The real estate website says that Houston residents spend 35 percent of their incomes on rent compared to 16 percent on a monthly mortgage.
Financial data firm SmartAsset considers Houston to be a top market for first-time homebuyers because of its larger number (186) of HUD-approved mortgage lenders — the largest coalition of lenders within any major market nationally. This gives residents more options when shopping for a mortgage, of which lenders fund 69 percent on average.
