The Dallas Morning News
By Haeven Gibbons
6:00 AM on Oct 23, 2023 CDT

Amid recent housing market changes and ongoing redevelopment efforts in East McKinney, the city has received updated data that highlights its current and future housing needs.

Root Policy Research, a community planning and housing research firm, prepared a Housing Needs Assessment for the City of McKinney in September 2020. Now, key metrics from the Housing Needs Assessment have been updated and show that McKinney has seen rapid and significant increases in home prices and rent prices and falling homeownership rates, similar to other Collin County cities and national housing trends.

Here are five things to know about the city’s ownership rates, home and rental price distribution changes, shortages in rental units and key differences between renters and owners.

1. Homeownership rates fall for those making between $50,000 and $75,000

From 2018 to 2021, homeownership rates for households earning $50,000 to $75,000 fell by 13%. Likewise, for households earning $25,000 to $50,000, ownership rates fell by 10%. However, homeownership rates for households earning less than $25,000 rose as did rates for those making $75,000 to $100,000.

The overall homeownership rate in McKinney was 64% in 2021, a decrease of 3% from the homeownership rate in the city in 2018.

“Compared to the U.S. and Texas, McKinney has a slightly higher ownership rate. Across demographic groups McKinney has similar ownership rates as the U.S. and Texas,” according to Root Policy Research’s updated Housing Needs Assessment. “However, households with income below $25,000 are significantly less likely to be homeowners in McKinney—the homeownership rate of low income households in the U.S. and Texas is 41%, compared to 28% in McKinney.”

2. Home price distribution indicated ‘rapid and significant’ increase in prices

Of homes sold in McKinney in 2019, 63% were priced between $250,000 and $400,000. However, in 2022, only 17% of homes sold fell within this price range where 83% of homes sold that year were priced at $400,000 or above, according to the updated assessment.

“The home price distribution in McKinney is fairly similar to the Collin County distribution and less affordable than the Dallas metro as a whole,” according to the updated assessment.

3. Rentals above $2,000 more than double from 2018 to 2021

In 2018, 23% of rentals were priced below $1,000. However, in 2021, only 11% of rentals were priced below that amount. At the same time, the percentage of rentals priced above $2,000 more than doubled— from 13% in 2018 to 28% in 2021, according to the updated assessment.

“The rise in rental prices is not unique to McKinney,” the updated assessment said. “In fact, McKinney’s median rent has grown at a slower average annual rate and has remained more affordable than Allen, Frisco, Plano and Collin County overall.”

But in 2018 half of McKinney renters paid over $1,250 per month, a rate that is considerably less affordable than in the Dallas metro area overall.

4. Rental gap increases for those earning less than $35,000 annually

In 2021, McKinney had a shortage of about 5,145 rental units priced affordably for renters earning less than $35,000 per year due to stark decreases in the supply of such units. The shortage has grown from about 3,700 units in 2018.

“This shift is due to a combination of losses in affordable rentals and an increase of about 1,700 households earning less than $35,000 per year,” the updated assessment said. “The sizable increase in low income households is likely partially explained by the lack of affordability in surrounding communities.”

5. Owners face lower rates of cost burden

In McKinney, owners tend to be older and earn higher incomes than renters where the median income for renters is 48% of the median income for owners. Further, owners are more likely to be non-Hispanic, White and Asian, as homeowners are underrepresented among the Hispanic and African American populations. Between 2018 and 2021, the homeownership rate for African American households fell from 41% to 34%.

Renters also face higher rates of cost burden compared to owners.

“Altogether, 46% of all McKinney renters, more than 9,200 renter households, are cost burdened, spending 30% or more of their income on housing costs,” the updated assessment said. “Of these, almost half (nearly 4,400 households) are severely cost burdened, paying more than 50% of their income on housing costs. Owners face lower rates of cost burden, with 29% of owners with a mortgage and 14% of owners without a mortgage facing cost burden.”