Buying a home in Dallas is increasingly challenging. There aren't many starter homes available, and even if there were, a new report says millennials wouldn't be able to snag them.
As part of an annual survey, Apartment List questioned millennial renters across the country about their plans for homeownership. The Dallas metro area lines up with the national trend: A lot of young people want to buy a place, but they can't afford to right now, and they may not be able to any time soon.
Eighty percent of metro-area millennials plan to buy a home, but most say they need at least three years to prepare. Affordability is cited as the main reason for holding off, and local millennials aren't underestimating what it will take to buy a home. Survey respondents think they need $19,885 for a down payment, and Trulia says they're correct. First-time buyers should have $19,750 in the bank, 20 percent of the median price of a Dallas-area starter home.
These perspective homebuyers have a long road ahead. Local respondents report having $2,689 in savings, with plans to contribute $208 each month. Based on the savings rate and down payment requirements, they'll need to save for six years to buy a home.
Apartment List says there's a disconnect between millennials' homeownership dreams and reality. "Many do not seem to realize their financial predicament — 3 in 4 renters plan to purchase a home within the next five years, but their savings trajectories suggest that they may need a decade or more to afford it," says Apartment List.
The delay in first-time home purchases is part of what Apartment List calls an ongoing affordability crisis that is shaping the future of the housing market.
"Some may choose to delay settling down and having children, while others will migrate to family-friendly cities on the interior of the country. Given the size of the millennial population, either scenario will have a profound impact on homeownership and renting in our society."