Being on the outskirts of San Antonio, or “Military City, USA” may be beneficial to the housing market in New Braunfels.
Newly released results from a study by the Real Estate Center at Texas A&M University showed veterans can be a stabilizing force in some housing markets. The study evaluated the New Braunfels-San Antonio area, as well as other base-heavy cities, on how the military influences Texas housing markets.
With about 6% of New Braunfels population being made up of veterans, according to 2017 U.S. Census Bureau data, veterans and active military members alike could be affecting the local home buying market.
“Active duty tend to be more active in rental space,” said Josh Roberson, a senior data analyst with the Real Estate Center at Texas A&M University. “The other community is the veteran community — which has a broad definition of anyone who’s been honorably discharged — tend to buy homes near military installations such as bases.”
The impermanence and youth of active military members tends to show them buying houses less and renting more, Roberson expanded.
“The military has a different buyer profile than the public,” Roberson said. “They exert their biggest influence on
the rental market, the market they are most active in.”
As the number of active military personnel has declined over the last decade, so has the number of rentals in areas around bases, the study stated.
According to the study results, a good example of this case is near Fort Hood, in the Killeen-Temple area.
“Residential home prices in the Killeen-Temple Metropolitan Statistical Area began to grow again in 2014 after several flat years,” Roberson states in the results. “Meanwhile, residential rent growth, both per month and per square foot, remained flat. At this time, Army personnel counts throughout Texas, including at Fort Hood, declined.”
In 2016, occupancy was also low for military authorized civilians to live on military bases, the study states.
“Even on-base privatized housing performed poorly during much of this time with stagnant rent growth and low occupancy,” it states.
Housing affordability is tough on military personnel, as well. New Braunfels housing affordability has remained a hot topic over the past year after a study commissioned by the city and 4B board showed approximately 70% of New Braunfels workers can’t afford to live in city limits.
Military persons looking for affordable housing also have to compete with others trying to find housing in a shrinking stock of affordable homes, Roberson said.
“The affordability issue is everywhere in Texas, affecting everyone — and it’s most apparent in big metros,” Roberson said. “There’s not enough supply for affordable homes — most are in the upper 100 (thousand)s or lower 200 (thousand)s.”
According to the study, when affordability was compared for general buyers and military buyers, the military person’s rank affected their likelihood of being able to buy a home.
“Officer’s income was more robust than most incomes in keeping up with housing price growth during that period,” the report said. “Officers, however, are the numeric minority with a considerable pay gap compared with enlisted service members. At any given time, there are typically four or five enlisted service-members for every officer in the military.”
This further fragments number of military able to buy home, Roberson said in the study results.
“In 2019, Consumer Finance Protection reported first time home buyers fell after Great Recession but began to recover from 2012-2016,” Roberson said in the report. “The same did not happen for first time home buyers who were in active duty.”
Veterans, however, have high homeownership rates — higher even than the public.
“Due to population size and high homeownership rate, veterans can have strong impact on an area’s housing market,” Roberson said. “This helps explain why some housing markets continue to grow despite diminishing active troop counts and other downturns.”
For more on the study results, visit https://www.recenter.tamu.edu.