Cypress Edition | July 2023

2023 HOME EDITION

RENTING VS. BUYING

year we’ll see an increase of maybe around 2%. So, while they are still increasing, they’re increasing at a much slower pace than they were before,” Smith said. Trevino said many consumers in the market are unaware of help that may be available to them. The Hous- ton Association of Realtors’ website shows 34 assistance programs avail- able in the Cypress area. In addition to those programs, bor- rowers can take out a “buydown” loan that lowers their interest rates for the rst four years after they’ve purchased their home, which can be an attractive alternative to putting down a larger cash down payment, Trevino said. “Instead of putting more money into the down payment, they’re buy- ing their interest rate down,” she said. ”Because if you put $10,000 more down, it’s really not going to make a big impact on your interest payment. But if you put up money to buy down your interest rate, that’s where you’ll see a larger impact on your mortgage payment.” Rental market growth The build-to-rent market has grown as builders choose to build in subur- ban communities, local ReMax real estate agent Collette King said. “I think it’s great for folks that are new to an area and want to familiar- ize themselves with an area or where they want to live before they pur- chase. They want to try the schools, the commute to work, but it denitely oers an alternative to nancing a new home,” King said. Construction is underway on Wing- span, Bridgeland’s rst build-to-rent neighborhood comprising 263 sin- gle-family homes. Preleasing will

begin this fall, said Steve Sams, senior vice president of master-planned communities residential for The How- ard Hughes Corp. The area is attractive to renters because they benet from the ame- nities associated with living in a mas- ter-planned community, and some families choose to rent in the area while their homes are being built in Bridgeland, Sams said in an email. Trevino said as people are choosing to rent to avoid higher mortgage rates, the cost of renting will increase for the entire market area. “Instead of [new] homes going rst onto the market for sale, they’re going on the market for rent,” Trevino said. “I think builders are just taking advantage of the fact that there’s a lot of potential buyers who can’t qual- ify and are looking to rent. And as rent has really gone up, … it’s a great source of income for those builders.” A May 19 analysis from Redn real estate rm shows Houston is one of the four major metros nationwide where buying a typical home is more aordable than renting one. The anal- ysis cited a lower cost of living and lower property values compared to other cities. “A lot of renters can buy, and a lot of renters should buy. ... Take the $2,500 they have [for] the rst month’s rent and security deposit— that’s $5,000. ... That’s a down pay- ment. But I think renters know how to rent, and they continue to rent because that’s what they’re comfort- able with,” King said. Danica Lloyd contributed to this report.

Houston is one of just four major U.S. metropolitan areas where it is more aordable to buy than rent the typical home. The other three cities—Detroit, Philadelphia and Cleveland—are all outside of Texas.

Monthly rent costs

Monthly mortgage costs

$4K

$3.5K

$3,801

$3K

$3,076

$2,951

$2.5K

$2,682

$2,371

$2K

$2,188

$2,334

$1.5K

$2,086

$1K

$500

Houston

Dallas

Austin

San Antonio

PROFILE OF HOMEBUYERS While the National Association of Realtors reported baby boomers made up the largest percentage of homebuyers nationally in 2022, local real estate agents said millennials are the largest group of homebuyers in Cy-Fair at this time.

of all buyers were rst-time buyers in 2022—down from 34% in 2021 .

was the typical age of a rst-time buyer in 2022—

26%

up from 33 in 2021. YEARS OLD

of non-homeowner millennials said they believed they would never be able to aord a house.

of all U.S. homebuyers were millennials.

28%

50%

of all U.S. homebuyers were baby boomers.

of millennials spent more than 30% of their income on housing.

39%

57%

For more information, visit communityimpact.com .

SOURCES: REDFIN, NATIONAL ASSOCIATION OF REALTORS, CLEVER REAL ESTATECOMMUNITY IMPACT

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CYPRESS EDITION • JULY 2023