When Priya and Rahul started looking for their first home in Allen, TX, they had a lot of questions. Was it more affordable to rent an apartment or buy a house? How much would they need to budget each month for housing costs like rent, mortgage, utilities, and insurance? As they crunched the numbers, they discovered some key differences between the cost of living in an apartment vs house in Allen.
Allen has seen steady population growth and rising housing demand in recent years. With major employers like Cisco and Experian expanding their presence, more people are looking to put down roots in this thriving Dallas suburb. But what does that mean for housing costs and affordability? Let’s take a closer look at the numbers.
The Housing Market in Allen Today
As of 2023, the housing market in Allen is competitive but still relatively affordable compared to other parts of the Dallas-Fort Worth Metroplex. The city has a mix of established neighborhoods with single-family homes and newer apartment complexes catering to young professionals.
Over the past year, the inventory of available homes in Allen has tightened somewhat, with properties spending an average of 28 days on the market before being sold. However, there are still options across a range of price points, from starter homes to luxury properties.
On the rental side, apartment construction has been booming to keep up with demand. Newer complexes are offering amenities like resort-style pools, dog parks, and co-working spaces to attract tenants. While rent prices have risen in the last few years, Allen still offers more affordable options compared to nearby cities like Plano or Frisco.
Renting in Allen: What’s Typical?
As of March 2023, the average rent for an apartment in Allen is:
- Studio: $1,247
- 1 Bedroom: $1,414
- 2 Bedroom: $1,663
- 3 Bedroom: $2,080
Rent prices can vary significantly based on the apartment’s age, size, and location. Newer luxury complexes in high-demand areas like Watters Creek or Montgomery Farm tend to have higher rents, while older properties a bit further from the city center are more affordable.
Allen is popular with young professionals in their 20s and 30s who are drawn to the city’s strong job market, recreational amenities, and relatively affordable rents compared to other parts of the Metroplex. Many choose to split a 2 or 3 bedroom apartment with roommates to save on housing costs. Families also appreciate Allen’s highly-rated schools and safe neighborhoods.
Owning a Home in Allen
As of March 2023, the median home price in Allen is $525,000. For a typical buyer putting 10% down on a 30-year fixed mortgage at 6.5% interest, that translates to a monthly mortgage payment of around $2,990.
However, the mortgage is just one piece of the homeownership cost puzzle. Allen homeowners also need to budget for:
- Property taxes: 2.17% average effective rate, or $950/month on a $525K home
- Homeowners insurance: $150 to $200 per month
- HOA dues: $30 to $100 per month in most neighborhoods
- Private Mortgage Insurance (PMI): 0.5% to 1% of the loan annually if putting less than 20% down
When you add it all up, the typical monthly cost of owning a median-priced home in Allen is around $4,240, assuming a 10% down payment. That’s about 2.5 times the average rent for a 2-bedroom apartment.
Renters vs. Homeowners: Who Lives Where?
Allen has a homeownership rate of 72%, which is higher than the national average of 64%. The city’s strong school system and family-friendly amenities make it an attractive place to buy a home and put down long-term roots.
However, renting is increasingly common, especially among younger residents. About 34% of Allen households are renters, and that number has been slowly rising. Young professionals often rent apartments close to their jobs in the city’s growing business districts. Some older residents also choose to downsize to a rental after their kids leave the nest.
For many would-be homebuyers in Allen, the biggest barrier is saving up for a down payment, especially as home prices have risen faster than incomes. Stagnant wages, student loan debt, and rising rents can make it difficult to save the $50,000 or more needed to put 10% down on a typical Allen home. As a result, the average age of first-time homebuyers has been steadily creeping up.
Typical Monthly Housing Costs in Allen
| Expense | Apartment (2BR) | House (Median Price) |
|---|---|---|
| Rent/Mortgage | $1,663 | $2,990 |
| Property Tax | $0 | $950 |
| Insurance | $12 | $175 |
| PMI | $0 | $220 |
| HOA Dues | $0 | $65 |
| Utilities | $160 | $320 |
| Total | $1,835 | $4,720 |
Estimates reflect mid-range properties and average usage. See a detailed breakdown of monthly costs in Allen.
What’s Driving Housing Costs in Allen?
Several factors are putting upward pressure on housing costs in Allen:
- Population growth: Allen’s population has grown by over 27% in the last decade, reaching nearly 110,000 residents in 2023. More people means more competition for housing.
- Economic development: Major employers like Cisco, Experian, and Frontier Communications have expanded their presence in Allen in recent years, bringing thousands of new jobs. Workers moving to the area for these opportunities are driving up demand for both rentals and homes.
- Construction costs: The price of lumber, concrete, and other building materials has risen sharply in the wake of the pandemic, making it more expensive to build new homes and apartments. Developers are passing those costs on to buyers and renters.
- Investor activity: Institutional investors have been snapping up single-family homes in Allen and other Dallas suburbs, often paying cash. This has made it harder for regular buyers to compete, especially those who need a mortgage.
At the same time, Allen has taken steps to promote more affordable housing options, such as allowing accessory dwelling units (ADUs) and providing density bonuses for developers who include affordable units in new projects. The city is also investing in infrastructure and amenities to support its growing population.
FAQs About Housing Costs in Allen
Is Allen an affordable place to live?
While housing costs in Allen have risen in recent years, the city is still relatively affordable compared to other parts of the Dallas-Fort Worth Metroplex. Rents and home prices are lower than in neighboring cities like Plano and Frisco, and Allen’s strong job market and high quality of life make it an attractive place to live for many people.
Why are housing costs rising in Allen?
Allen’s growing population, strong economy, and desirable location are all driving up demand for housing. At the same time, construction costs have risen sharply, making it more expensive to build new homes and apartments. Investor activity in the single-family home market has also made it harder for regular buyers to compete.
How does the cost of living in Allen compare to other cities in DFW?
Allen is generally more affordable than other northern Dallas suburbs like Plano, Frisco, and McKinney. However, it’s still more expensive than some other parts of the Metroplex, such as Arlington or Garland. Use this cost of living calculator to see how Allen stacks up.
Making Smart Housing Decisions in Allen
Whether you’re looking to rent or buy, it’s important to carefully consider your budget and long-term goals when making housing decisions in Allen. Key factors to keep in mind include:
- Location: Homes and apartments in highly desirable areas like Watters Creek or Montgomery Farm tend to come with a premium price tag. Expanding your search to neighborhoods a bit further out can yield more affordable options.
- Size: Opting for a smaller home or apartment can mean significant monthly savings on rent, mortgage, and utilities. Consider how much space you really need and whether downsizing could make sense.
- Amenities: Luxury amenities like granite countertops or resort-style pools can drive up the cost of both rentals and homes. Decide which features are must-haves and which ones you’re willing to compromise on.
- Commute: Allen’s location along major highways like US-75 and SH-121 makes for convenient commutes to many parts of the Metroplex. However, living closer to your job could save you time and money on transportation costs.
- Long-term plans: If you plan to stay in Allen for several years or more, buying a home could make financial sense. But if you value flexibility or may need to move in the near future, renting could be the better choice.
No matter your housing budget or preferences, Allen offers a variety of options for renters and buyers alike. By carefully weighing the costs and benefits of different living situations, you can find the right fit for your lifestyle and financial goals.