5 Must-Know Trends: Top Population Growth Cities to Watch
According to studies covered by The Wall Street Journal, 46 million Americans moved to different zip codes in states such as Texas, Florida and Arizona in a 12-month period ending in February 2022. As a result, these rapid migrations quickly bid up home prices to levels that became unaffordable for many long-time residents.
After two years of a for-sale housing market that seemed to be on steroids, the question now is whether it is time for the multifamily market to shine even brighter due to relative affordability. To get a sense of the demand for housing in some of these rapidly growing areas, 5 Trends analyzed some data to identify the following:
- The Top 5 metropolitan areas for recent population growth;
- The median monthly rent for a typical multifamily unit;
- How much tenants of these typical multifamily homes might save versus (a) renting single-family homes or buying either (b) condos or (c) single-family homes in the same area.
As an example, an analysis by John Burns Real Estate Consulting shows that a little over a year ago the monthly cost of owning and renting a typical single-family home was virtually the same. However, on a national level, today ‐ and due to a combination of sharply rising mortgage interest rates and higher home prices ‐ owning that same single-family home costs a median of $839 more per month than renting. Notably, this differential is almost $200 higher than at any time since the turn of the century.
Since those individuals and families relocating to hotspots in the Sun Belt states and the South still require a place to live, they’ll have to make choices between purchasing smaller homes in less desirable areas, renting existing or new single-family homes; or, for those who prefer city amenities, opting for a multifamily flat or townhome.
Top 5 Population Growth Cities
1. Dallas, TX
The greater Dallas-Ft. Worth region, the largest in Texas and the fourth-largest in the country just ahead of Houston, is also the economic and cultural hub of the north part of the state. Nicknamed by some as “Silicon Prairie,” the area’s economy is home to 23 Fortune 500 companies focused mostly on banking, insurance, technology, energy, healthcare, medical research, transportation and logistics. The region also has a thriving arts and music scene in addition to several professional sports teams.
The metro area was the country’s fastest-growing between 2021 and 2022, adding over 97,000 people. Multifamily investors here could help tenants save $654 to $1,809 per month versus renting the typical single-family home or buying either single-family homes or condominiums.
| Population Change 2021-2022: 97,290 | Net Migration 2021-2022: 62,921 | ||
| Median multifamily rent: | $1,451/mo | |
| Cost to rent single-family vs. rent multifamily home: | $698 more | (48% +) |
| Cost to buy single-family home vs. rent multifamily home: | $1,809 more | (125% +) |
| Cost to buy condo vs. rent multifamily home: | $654 more | (45% +) |
| Calculations are based on monthly estimated costs. | ||
2. Phoenix, AZ
Known as “The Valley of the Sun Belt,” Arizona’s capital city region is both the largest in the state and the 11th largest in the country.
Originally settled as a thriving farming community reliant on a sophisticated system of canals, it was after World War II when air conditioning became more wide-spread and high-tech companies began to move into the area that the economy began to diversify. While the region’s population growth and housing market both suffered following the Great Recession, more recently its relatively affordable housing and fitness-oriented lifestyle have helped it boom.
The metro area was the country’s second, fastest-growing between 2021 and 2022, adding over 78,000 people. Multifamily investors here could help tenants save $611 to $2,352 per month versus renting the typical single-family home or buying either single-family homes or condominiums.
| Population Change 2021-2022: 78,200 | Net Migration 2021-2022: 70,097 | ||
| Median multifamily rent: | $1,634/mo | |
| Cost to rent single-family vs. rent multifamily home: | $611 more | (37%+) |
| Cost to buy single-family home vs. rent multifamily home: | $2,352 more | (144%+) |
| Cost to buy condo vs. rent multifamily home: | $1,061 more | (65%+) |
| Calculations are based on monthly estimated costs. | ||
3. Houston, TX
The Houston area is the southeast anchor of the greater mega-region known as the Texas Triangle. It’s also the second-largest population center in the state behind Dallas-Ft. Worth as well as the fifth largest in the country. Named after former General Sam Houston and once the capital of the Republic of Texas, it was really in the 20th century when the region saw rapid growth, especially in the areas of trade, petroleum products, the U.S. space program and the world’s largest concentration of healthcare and research institutions. Over time, more companies have also decided to call Houston home, with the most Fortune 500 companies after New York City.
The metro area was the country’s third fastest-growing between 2021 and 2022, adding over 69,000 people. Multifamily investors here could help tenants save $339 to $1,310 per month versus renting the typical single-family home or buying either single-family homes or condominiums.
| Population Change 2021-2022: 69,094 | Net Migration 2021-2022: 31,921 | ||
| Median multifamily rent: | $1,278/mo | |
| Cost to rent single-family vs. rent multifamily home: | $488 more | (38%+) |
| Cost to buy single-family home vs. rent multifamily home: | $1,310 more | (103%+) |
| Cost to buy condo vs. rent multifamily home: | $339 more | (27%+) |
| Calculations are based on monthly estimated costs. | ||
4. Austin, TX
On the list of the fastest-growing metro areas since 2010, this capital city region of Texas offers one of the country’s best live music scenes, the annual South by Southwest Festival, high-paying high-technology employment, a 50,000-student University of Texas campus and numerous outdoor activities around its collection of local lakes and rivers. Whether known as “Silicon Hills” or “The Live Music Capital of the World,” the rapid increase in population has resulted in growing pains and rapid increases in home prices.
The metro area was the country’s fourth fastest-growing between 2021 and 2022, adding over 53,000 people. Multifamily investors here could help tenants save $877 to $3,317 per month versus renting the typical single-family home or buying either single-family homes or condominiums.
| Population Change 2021-2022: 53,301 | Net Migration 2021-2022: 42,541 | ||
| Median multifamily rent: | $1,654/mo | |
| Cost to rent single-family vs. rent multifamily home: | $877 more | (53%+) |
| Cost to buy single-family home vs. rent multifamily home: | $3,317 more | (201%+) |
| Cost to buy condo vs. rent multifamily home: | $2,389 more | (144%+) |
| Calculations are based on monthly estimated costs. | ||
5. Riverside, CA
Although referred to as the Riverside MSA by the Census Bureau, this region larger than ten U.S. states is more commonly known as the gigantic Inland Empire (IE), and offers key affordable bedroom communities, warehouse space and other industrial uses to the adjacent counties of Los Angeles and Orange. Once a major center of agriculture, since the 1970s it has experienced a rapidly growing population, fed by families migrating in search of affordable housing, has led to more residential, industrial, and commercial development.
The metro area was the country’s fifth fastest-growing between 2021 and 2022, adding nearly 48,000 people. Multifamily investors here could help tenants save $673 to $2,884 per month versus renting the typical single-family home or buying either single-family homes or condominiums.
| Population Change 2021-2022: 47,601 | Net Migration 2021-2022: 33,986 | ||
| Median multifamily rent: | $1,984/mo | |
| Cost to rent single-family vs. rent multifamily home: | $673 more | (34%+) |
| Cost to buy single-family home vs. rent multifamily home: | $2,884 more | (145%+) |
| Cost to buy condo vs. rent multifamily home: | $1,833 more | (92%+) |
| Calculations are based on monthly estimated costs. | ||
And rounding out the Top 10 …
6) Atlanta, Georgia; 7) Tampa, Florida; 8) San Antonio, Texas; 9) Charlotte, North Carolina; 10) Raleigh, North Carolina
All referenced charts are comprised of data collected (in part or in full) from the following resources: U.S. Census Bureau, Apartment List, Redfin and Zillow
