High Home Prices Drive Renter Demand in Dallas, Houston

Dallas and Houston topped the list of residential real estate markets exhibiting downward pressure on homeownership demand, according to the recent Beracha, Hardin & Johnson Buy vs. Rent (BH&J) Index. The Q4 2018 index, produced by Florida Atlantic University and Florida International University, said that Dallas, Denver and Houston “are all producing scores indicating significant downward pressure.”

BH&J Index scores approaching “1” indicate significant downward pressure on home ownership demand. Dallas’ index was .98, Denver reported .81 and Houston’s was .72. “While the BH&J Index measures the tradeoff between buying and renting in terms of wealth creation, it also serves as a sensor embedded in 23 of the nation’s housing markets measuring pressure on the demand for homeownership,” said real estate economist and FAU professor Ken Johnson, one of the BH&J creators.

Johnson, along with real estate economist and BH&J co-creator Eli Beracha (with FIU), agrees that the housing market is peaking; the current threat to housing values is uncertainty over future mortgage rates.”