Buying a home can be a challenge, and the housing forecast looks especially grim for millennials. As part of an annual survey, Apartment List asked 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 anytime soon.
Seventy-nine percent of local millennials plan to buy a home, but most say they need at least three years to prepare. Affordability is the main reason for holding off, not surprising to anyone who's looked at the Dallas market as of late.
While millennials understand that the market is pricey, they greatly underestimate what it will take to buy a home. Survey respondents think they need $20,380 for a down payment, but 2016 data from the National Association of Realtors says first-time buyers should have $33,660 in the bank, 20 percent of the $168,300 median priced Dallas-area starter home.
These prospective homebuyers have a long road ahead. Local respondents report having $2,840 in savings, with plans to contribute $240 each month. Based on the savings rate and down payment requirements, they'll need to save for almost 10 years to buy a home. That's four years longer than the time calculated on the 2016 survey.
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. Homeownership across the country is historically low, and millennials, the largest generation, won't be able to boost those figures.
"High levels of student debt and stagnant career opportunities have long kept millennials sidelined from the real estate market and, even with recent improvements in the labor market, affordability continues to be a major concern. Our analysis shows that the lack of savings by millennials, combined with the extreme shortage in affordable entry-level homes, means that a large share of millennials may be stuck renting for years."