Rental Price Upside Potential: 1 SFR inventory is also at near lows from the eviction moratorium and lease renewal activity. 2 Record high occupancy, low turnover providing limited choices for people to price-shop SFR options. 3 Those exiting forbearance will need a place to rent, increasing demand. 4 Inward population migration from relocations, families are likely to rent an SFR before buying. 5 Just hours after his inauguration, President Biden issued an executive order extending eviction protections for the country’s 44 million rental households until March 31. 6 Biden has also proposed a $1.9 trillion stimulus package. If passed, it would extend the eviction moratorium through September, further locking up inventory. Rental Price Downside Risks: 1 It is cheaper to buy than rent with 20 percent down (using median purchase and rent prices), and about the same monthly price with 15 percent down. The higher wage earners of the rental market are buying. According to the National Rental Home Council, a survey of tenants that moved out in the last six months showed that ~28 purchased a home. 2 High unemployment rates in lower-wage industries (renters). 3 Slow job recovery will limit wage increases and stifle rent increases. 4 Eviction moratorium ending September… maybe? When the eviction dam breaks, this may lead to high vacancy rates and lower the “qualified” renter pool. 5 Christmas/winter spike in COVID-19 cases leading to business restrictions and more possible layoffs in lower-income industries. Bottom line, Houston is a huge market with a growing and diverse economy, further supported by companies relocating their business and staff here. These are good signals of a healthy market and provides many opportuni - ties for successful long-term investments. •
HOUSTON FACTS
POPULATION
The 2019 Census shows the Houston, Texas Met - ropolitan Statistical Area (Houston MSA) is the fifth largest in the U.S. with nearly 7.1 million residents. Houston has been growing by an average of 110,000 residents per year, with a five-year population increase of over 8.7 percent.
JOB MARKET
The Houston MSA economy is the seventh largest in the U.S. by GDP. The metro has a large cohort of jobs in professional services, mining and construc - tion, government, education and health services, and trade/transportation industries. Over the last five years, the metro ranks 6th in total jobs add - ed. Some job sectors such as professional and business services and transport and warehousing services have recovered completely compared to the pre-pandemic peak.
INCOME
The 2019 median household income of $69,193 is slightly above the national median income of $68,700. One-year median household income is up 5.8 per - cent between 2018 to 2019, and up over 15 percent for the last five years. Texas is one of the seven states with no state income tax, benefiting resi - dents with higher post-tax income. However, Harris county property taxes are in the top quartile at two percent.
Information and statistics from the Bureau of Labor Statistics employment data, Department of Labor report, Census/ACS Tables and RentRange® data sources.
Fred Heigold III is the senior data analyst at Altisource® / RentRange®, an industry leader inmarket data and analytics for the single-family rental housing industry.
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