Dallas Millennials Aren't Homeowners Because They're Broke, Not Because They Like Renting
The Dallas Morning News' real estate reporter Steve Brown published a piece over the weekend blaming millennials for declining homeownership rates in the Dallas area.
This is true. Homeownership rates among the under-35 set -- i.e. the age range currently occupied by millennials -- has declined markedly since peaking around 2005, which contributes to lower overall homeownership rates, because math. Brown's assertion that local homeownership rates are relatively low is also on point. The U.S. Census Bureau released data last month pegging the 2014 homeownerhip rate in Dallas-Fort Worth (read: the Dallas-Ft. Worth-Arlington Metropolitan Statistical Area) at 57.7 percent, lower than all but 11 of the country's 75 largest metros and well below the national average of 64.5 percent. So, it seems, is the idea that the local drop can be blamed on millennials. Though Generation X (ages 35-44) has been fleeing home-buying at a faster pace nationally, the younger cohort has set the pace locally. The local census data on this isn't wonderful (it's infrequent and has a significant margin of error) but it suggests that DFW millennials are responsible for roughly 75 percent of the local drop in homeownership to Gen X's 25 percent.
Unfortunately, Brown manages to take perfectly good data and transmute it into a steaming pile of bullshit by positing that millenials have stopped buying houses because they're obnoxiously affluent. To illustrate, he offers the example of Parham Barari, a young professional who just moved into a luxury apartment in Victory Park. Here's the nut of the story:
His new digs don't come cheap. Barari is paying just under $3,000 a month for his 885-square-foot, 22nd-floor apartment. That's enough to afford a home mortgage payment instead of apartment rent.
"People tell me that, but what I have right now is great," said Barari, who just turned 30 and works in medical sales. "I'm a single guy. When I'm married, I might look at houses, but I'm not there yet."
Barari and thousands of young North Texas residents like him are the reason Dallas-Fort Worth homeownership levels are sinking.
I've seen Brown's picture next to some of his stories, so I know that he is old, like my parents are old. For people of a certain age, blaming things on snot-nosed young whelps, particularly if they are endowed with more money than sense, is basically a reflex.
But insufferable 20- and 30-somethings renting stupid-expensive apartments in trendy places isn't a new phenomenon in Dallas. (Yuppie (n): a young college-educated adult who has a job that pays a lot of money and who lives and works in or near a large city; first known use: 1980; see also: Uptown). Does that really explain the plummeting homeownership rate among millennials?
Let's consider a counter-example. This guy is also college-educated and also just turned 30. He would never dream of paying $3,000 per month for an apartment, nor is his journalism career likely to be lucrative enough that he could afford that type of rent, ever. He and his wife would like to buy a house, only their salaries are modest and they spend an ungodly amount paying down college debt and financing their two kids' astronomically expensive preschool education.
That is also an anecdote about a millennial and yet the takeaway is the opposite. This second guy (let's just call him Derek Mickelson) wants to buy a home but can't. So which one is it? Is the average Dallas millennial not buying a home because he has so much money and loves Victory Park? Or is he not buying a home because he doesn't have enough money?
Luckily there is data, some of which was broken down by FiveThirtyEight last week. As it turns out, coming of age in the Great Recession wasn't great for millinnials' finances. The income of households headed by 18- to 33-year-olds dropped by 19 percent between 2007 and 2013, a decline 50 percent greater than experienced by the median U.S. household. And 18- to 33-year-olds who do own homes have seen a particularly sharp drop in home values. Brown notes that Dallas weathered the recession fairly well and boasts a strong job market that attracts successful young people, but even so the economic picture has become bleaker for millenials. According to census data, a greater percentage of them were making less than twice the poverty line in 2013 than five years earlier. Also, at least in Dallas proper, homeownership rates have been falling for 50 years, i.e. for longer than millennials have been alive.
That said, there is also data to show that millennials are to blame for basically everything else.
Send your story tips to the author, Eric Nicholson.