Another day, another article about what Millennials are — or are not — up to. With housing affordability looming as a constant concern, it comes as no surprise that Millennials find themselves profoundly affected. They’re feeling the pinch, even in Dallas where housing remains more within reach than in many areas of the country.

A recent report on Millennial home buying power by ABODO.com looks at the shrinking number of 18  to 35 year olds able to afford homes. It also analyzes where Millennials have the best chances of buying a home, and the kinds of homes they can afford.

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Millennial Homebuyers

Nationally, about half of American homebuyers are under 36, according to the latest study on consumer trends from Zillow, putting them squarely in the Millennial camp, born from the early 1980s to the early 2000s.

Mail surveys from the National Association of Realtors indicate that first timers account for about 32 percent of all buyers, and Dallas Builders Association member builders ranked Millennials behind Generation X and Baby Boomers as their most common buyer in a recent survey.

The contrasting studies may be related to the methodology, but the Zillow study provides optimism about Millennial homebuyers.

Millennials have been slow to buy their first house—housing economists call this “delayed household formation” and cite it among Millennials as one of the biggest reasons we saw a slow housing recovery nationwide.

According to the National Association of Home Builders, 65 percent of Millennials hope to buy a single-family home. But this age cohort experienced the largest decline in homeownership rates since 2006. In fact, only 34.1 percent of Millennials own a home, down from 39 percent in the second quarter of 2010, according to the most recent U.S. Census Bureau’s Housing Vacancy Survey, which reported data from 2010 to 2016. A recent Pew Research Study further shows 32 percent of Millennials still live with their parents.

How do Millennial homebuyers fare in DFW? We’re experiencing record growth and are on track to add more than 100,000 jobs this year, causing price increases, especially for new homes. The median closing price for a new detached home in the Dallas-Fort Worth region increased 5.4 percent year-over-year to $305,637 in August, compared to the median closing price for an existing detached home, which is now $217,360.

“Market demand, increasing local regulations, and an ongoing labor shortage are all reasons why the average new home is more than $88,000 more expensive than the average existing home,” said Dallas Builders Association Executive Officer Phil Crone. “Obviously, that kind of premium is going to make it difficult for most first-time homebuyers to step into the new home market. We need to ensure our market and our industry meets the needs of Millennials as they hold the key to our region’s continued prosperity.”

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millennials renting

Photo: Billingsley Company

We’ve all heard the sad story of Millennials living with their parents, drowning in student debt, and working at Starbucks with liberal arts degrees.

While part of that image is accurate for a percentage of the U.S. population—a recent Pew Research Study showed 32 percent of Millennials do live with the folks—a larger percentage of those 18 to 34 years old live independently (48 percent). And a lot of them are renting.

Millennials are often drawn toward renting versus buying, in part because of that student loan debt. They also like the flexibility of being able to take advantage of new economic opportunities by not being tethered to a mortgage. These are free spirits.

“For Millennials, life is about experience over ownership,” said Sumner Billingsley, a managing partner of The Brickyard in Farmers Branch. “Thoughtfully designed apartments and rental townhomes give [them] the ability to enjoy creative and unique design elements that are typically reserved for single family homes, but at a budget [they] can afford.”

So what are the top five considerations of today’s Millennial looking for a temporary dwelling? The Billingsley Company did some research and came up with a list.

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Millennial Homebuyers

Millennial Homebuyers are missing from the market, but Austin and Dallas may be better values first-time homebuyers in this generation over San Antonio and Houston.

Where are all the first-time homebuyers? In their cozy rentals, that’s where!

With a market almost completely devoid of newby buyers, and the rental market being as competitive as it is (just ask my friend looking for a single-family home in East Dallas!), and prices going up across all segments, it’s just hard to find a place to put your leather couch and Le Creuset stock pot. Millennials hold a lot of potential when it comes to real estate purchases, but where can the find the best value? Is it San Antonio and Houston?

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monthly_payment 1-affordability

I love using real estate apps on my phone. Every time I drive by a “For Sale” sign in a neighborhood, I pull out my phone and queue up one of my favorite listing apps (yes, I have more than one on my phone!) and check out the property and sometimes other ones nearby.

Now, if I was actively looking for a home and wanted to know what kind of rate I could get and how much my monthly mortgage payment would be on a property, well, most listing apps don’t offer that service. And if they do, the information isn’t always accurate.

But Realtor.com, the site that prides itself on having the most accurate listing information on the web, says it’s fixed that issue for good.

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