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Dallas rates as one of easiest places to save for a home down payment

A generous down payment is often the key to buying a home.

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Dallas residents hoping to buy their first home can breathe a little sigh of relief. A new analysis shows DFW is the second best major metro area in the U.S. for putting aside money toward a down payment.

The analysis, produced by Zillow Group-owned RealEstate.com, indicates it takes an average of three years and five months for a first-time homebuyer in DFW to stash enough cash for a 20 percent down payment. Only Chicago had a shorter saving period for a 20 percent down payment.

While DFW boasts a hot job market and sizzling population growth, “the region has somewhat slipped under millennials’ radars — so much so that the Dallas Regional Chamber recently launched a ‘Say Yes to Dallas’ recruitment initiative. Maybe it’s time to give Dallas a second look,” RealEstate.com says.

The Austin metro area ranks ninth in the RealEstate.com analysis, with it taking an average of four years and seven months to save money for a 20 percent down payment.

“Austin is a magnet for millennials,” RealEstate.com says. “Employment opportunities draw them here, with the cool vibe, nightlife, and focus on green living cementing the deal. The housing market here is competitive, so expect a bidding battle once you’re ready to buy.”

By comparison, Portland, Oregon, is the worst place to save for a down payment: The average time there is 13 years, two months, according to RealEstate.com. Denver is second worst, at 12 years, five months.

Here’s the lowdown on how RealEstate.com arrived at the down payment numbers. The analysis factored in the median household income among millennials (ages 24 to 36) in the 35 largest U.S. metro areas, along with their estimated annual household savings, to figure out how long it would take to save for a 20 percent down payment on a starter home (priced within the bottom third of the market).

In DFW, the median annual income for millennial households is $50,600, with annual savings of $10,843. Taking that data into account, RealEstate.com arrived at a 20 percent down payment totaling $37,080 for an entry-level, single-family home with a median value of $185,400.

For Austin, the salary and savings figures were about the same as DFW’s, but the down payment and home numbers were higher. RealEstate.com computed a median annual income of $50,700 for millennials in the Austin area, with $10,864 in annual savings. For a starter home with a median value of $249,700, that would result in a 20 percent down payment of $49,940.

Twenty percent is the sweet spot for down payments, as a buyer with a down payment of less than that amount typically must buy private mortgage insurance. That adds to the cost of the monthly mortgage payment.

The RealEstate.com study might give solace to some DFW and Austin millennials who covet a home. According to Zillow Group’s most recent housing trends report, 39 percent of millennial homebuyers find it difficult to save money for a down payment.

“Contrary to popular belief, millennials want to buy homes, but high home prices, low inventory, and stagnant wage growth are some of the many factors that may be driving would-be buyers into delaying homeownership,” Justin LaJoie, general manager of RealEstate.com, says in a release.

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Dallas lands among 10 most affordable U.S. metros for living alone

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In DFW, renters can afford to live solo.

Not everyone is cut out for living with roommates, but finding an affordable place to live alone can be tricky. Luckily, Dallas-Fort Worth sits among the top 10 most affordable U.S. metros for living by yourself, according to a new report.

Analysts at Apartments.com discovered North Texas renters spend the seventh lowest share of their monthly income on single-bedroom rent out of the 50 biggest metros in the U.S.

The study used a 30 percent "common budgeting guideline" to calculate the share of median renter household income spent on one-bedroom asking rents across the 50 largest U.S. metros, and determined renters can only afford to live alone in 24 of the 50 metros without crossing the 30 percent threshold.

The median annual income of a DFW renter household is $63,172, and the findings show the typical asking rent for a one-bedroom apartment comes out to $1,348 per month. The study determined single renters spend 25.6 percent of their monthly income on rent based on the budgeting suggestion.

Texas' favorable rental market also extends outside of the Dallas-Fort Worth Metroplex: Austin surprised as the No. 1 most affordable metro for living alone, and San Antonio appeared among the top 10.

Austin renters spend the smallest share of their income on single-bedroom apartment rent, at 23.1 percent. That's based on a median renter household income of $70,008 and a $1,348 monthly one-bedroom asking rent price.

Dwindling rent prices and the prevalence of major tech employers are also attracting new renters, and the city has an 11.6 percent apartment vacancy rate.

"The average rent in Austin has decreased year over year, and construction of new housing increased by 30 percent over the past decade," the report's author wrote. "Tax incentives in Texas draw large tech corporations, like Google and Apple, to the Austin area, which has increased average wages, added more jobs to the local economy, and attracted renters in the process."

San Antonio ranked right above DFW in sixth place nationwide with solo renters spending 25.4 percent of their monthly income on single-bedroom rent, coincidentally the same share as single renters living in Raleigh, North Carolina and Salt Lake City, Utah.

This is the income and one-bedroom rent data in San Antonio:

$51,029 – median renter household income
$1,082 – one-bedroom monthly asking rent

A separate Apartments.com survey found 39 percent of U.S. adults would never feel comfortable living with a roommate, and 16 percent of renters would rather pay more in rent to live alone than consider living with a roommate.

"Factors contributing to lower rents may include recent high levels of construction, rising vacancy rates as renter demand catches up to supply, and fewer regulations, such as flexible zoning and lower development costs compared to other parts of the country," the report said. "Living alone has become a non-negotiable for many renters, and some renters are willing to make tradeoffs to afford this lifestyle."

The top 10 most affordable U.S. metros for living alone are:

No. 1 – Austin
No. 2 – Oklahoma City
No. 3 – Phoenix
No. 4 – Raleigh, North Carolina
No. 5 – Salt Lake City, Utah
No. 6 – San Antonio
No. 7 – Dallas-Fort Worth
No. 8 – Denver
No. 9 – Portland, Oregon
No. 10 – Columbus, Ohio

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