Out of 314 U.S. cities, Frisco and Plano ranked first and second in a new study that tracked the increase in the percentage of renters vs. homeowners over the past decade.
Yes, that’s correct: Frisco and Plano lead the nation in residents choosing to rent an apartment versus buying a condo or home.
Frisco more than doubled its renter population, growing 59 percent over 10 years. Plano’s percentage of renters grew by 41 percent. Neighboring McKinney ranked seventh in the analysis with its percentage of renters growing by 25 percent.
The South and Southwest take the lead when it comes to the cities that saw the greatest increases in their renter shares, according to the RENTCafé analysis.
Data used in the analysis was sourced from the U.S. Census Bureau’s American Community Survey one-year estimates for the 2010-2019 period. The data tracks apartments and not single-family homes.
At first glance, the reason would appear to be opportunity.
The Collin County corridor, especially near the Sam Rayburn Tollway and the Dallas North Tollway intersect, is a hotbed of economic activity.
Shopping venues and business offices cluster the area. Toyota Motor North America is headquartered in Plano. The Dallas Cowboys have a major presence in Frisco and plan for additional growth.
But the exodus to people preferring to rent rather than own reflects the general housing climate in North Texas and nationwide — inventory, which is driving higher home prices beyond list prices, making renting a more reasonable option.
“It’s supply and demand,” says Doug Ressler, Yardi Matrix business intelligence manager. “Before the pandemic, it was an issue with affordability. That’s still with us, but a couple of other things are playing out: supply — not being able to fuel the need fast enough — and lack of availability.”
Although mortgage rates have fallen to historic lows, some renters would rather not pay the rising home prices and endure the financing process, Ressler says.
“Are you going to be able to qualify for the housing you want?” Ressler says.
This has impacted rental prices everywhere. Apartment rents are falling.
According to Zumper’s latest survey of one-bedroom rentals, the year-over-year rent fell 6 percent in Frisco and 8 percent in Plano. Zumper’s analysis shows rent for a one-bedroom apartment in October was $1,210 in Frisco and $1,090 in Plano.
Apartment List also released its October rent analysis with Frisco one-bedrooms going for $1,210 and Plano 1BRs renting for $1,180 a month.
Back to the RENTCafé analysis, Plano’s share of homeowners fell by 16 percent, the most significant decrease among Dallas-area cities. Mesquite registered a 12 percent increase in homeownership.
How long renter growth will continue to increase in Frisco, Plano, and McKinney could be determined by rapid development in the area. Although inventory is low, that could change for Frisco and McKinney.
According to Addison-based Tomlin Investments, Frisco has surpassed the 2,000 building-permit mark for the year, making it the fastest-growing D-FW suburb for single-family home construction.
From Jan. 1 through October, builders targeting Frisco were issued 2,011 permits, an increase of 16 percent from the same 10-month period last year. For McKinney, 1,305 permits were issued, a 1-percent decrease. Plano, which is mostly built out, had 236 permits issued.
Yeah, this metric is something we’ll keep our eye on.