Over the last six years, the number of rental units constructed across the country has risen steadily to match the increase in renters.
In 2017, newly constructed rental units reached a 20-year high. However, that number is expected to fall slightly in 2018. According to a recent article on RENTcafe.com, the construction of new rental units across the country is projected to decrease by 35,000 units to less than 300,000 overall units in 2018.
However, the article also points out that when the timeframe expands to 3 years, which more accurately includes the whole construction process from planning to delivery, we see the highest number of units constructed since the peak construction period between 1983 and 1985 when 933,000 units were constructed. By the end of 2016-2018 timeframe, a total of 910,000 units are projected to be completed.
Specifically in Texas, the article notes that the Dallas-Fort Worth metro area is second only to New York City in the number of units it will add in 2018 (17,132 units) which can largely be attributed to the increase in population of more than 146,000 people.
Other cities in Texas adding more than 300 units in 2018 include:
- Austin Metro area – 8,837 units
- Houston Metro area – 7,646 units
- San Antonio-New Braunfels Metro area – 3,501 units
- Corpus Christi – 1,006 units
- Waco – 384 units
So, why are new rental units continuing to be constructed? The renter population continues to grow. It continues to grow despite a steady increase in rental prices, which have not seen an annual decrease since 2010.
Already in the first six months of 2018, the national average for rental prices has seen a 2.3% increase. Time will tell if it ends up beating 2017 which saw a 3.5% increase in rental prices. That said, the number of those renting continues to increase because ultimately, home prices are continuing to climb faster than rent prices.
The bottom line: Rental units will continue to be in demand, and the renting population will continue to grow and shows only slight signs of slowing down.
On the House blog posts are meant to provide general information on various housing-related issues, research and programs. We are not liable for any errors or inaccuracies in the information provided by blog sources. Furthermore, this blog is not legal advice and should not be used as a substitute for legal advice from a licensed professional attorney.