JACKSONVILLE, FL – Jacksonville has experienced consistent population growth over the years, leading to a strong demand for housing—both owned and rented. Our analysis reveals a significant negative correlation between population growth and homeownership rates, particularly with a two-year lag. This correlation is not just a statistical artifact but reflects deeper dynamics in the housing market that influence both ownership and rental trends.

The data for this analysis was sourced from the Federal Reserve of St. Louis economic data (FRED). We utilized time-series analysis and lagged correlation to understand how population growth impacts future homeownership rates. The chart below shows the Year-over-Year (YoY) percentage change in homeownership (orange) and population growth (blue) since 2010. Initially, the correlation may appear weak, but a clearer pattern emerges when population growth is lagged by two years.

Population and Homeownership Dynamics

A strong negative correlation exists between population growth and homeownership rates when a two-year lag is applied. This suggests that an increase in population can predict a decline in homeownership rates, leading to higher rental demand. When population growth is lagged by two years, the inverse relationship between homeownership (orange) and population growth (blue) becomes evident. This means that as the population rises, homeownership rates tend to fall after two years, indicating increased rental demand.

Predictive Power of Population Growth

The correlation analysis shows that population growth is a strong predictor of homeownership rates two years into the future, with a correlation coefficient of -0.64. While years three, four, and five also show negative correlations, the strongest correlation is at the two-year mark. This suggests that it takes time for changes in population to impact homeownership rates.

Supply and Demand Dynamics

The relationship between population growth and homeownership can be attributed to supply and demand dynamics. As more people move to Jacksonville, competition for homes increases. With homeowners not rushing to sell, the supply remains limited. Increased demand coupled with limited supply makes renting the more viable option for the growing population.

Population growth is beneficial for the local economy and multifamily real estate markets. The key takeaway from our findings is that current population growth is an excellent indicator of future rental demand, particularly in Jacksonville, FL, where the population continues to rise. This insight is invaluable for investors and developers as they plan for future housing needs in the area. Understanding these dynamics allows for better strategic planning and investment decisions, ensuring that the housing market can meet the demands of a growing population.

In summary, Jacksonville’s growing population has significant implications for homeownership and rental trends. By anticipating these changes, stakeholders can make informed decisions that align with both market realities and future demands.

For a more in-depth analysis and to explore the detailed data and methodology behind these findings, read the full article here.

About Nuvo Capital Partners

Nuvo Capital Partners is a niche market-focused multifamily private equity firm operating throughout the Southeastern United States. As a dedicated sponsor (General Partner), we specialize in institutional quality real estate investments within these regions. Our team, with a combined 25+ years of experience, has facilitated over $700M in transactions (10,000+ units). Delivering a transparent investment process, we provide our investors with access to high-quality real estate opportunities, while also ensuring integrity throughout. Our commitment extends to providing monthly, quarterly, and yearly in-depth reporting for our valued investors. To learn more, visit nuvocapitalpartners.com.

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