There is, as The Washington Post reported a couple of weeks ago, a new normal in the American housing market. Nationally, the homeownership rate has dropped by about five percentage points since peaking in 2005 just before the country's real estate bubble burst. In the decade since, an increasingly large percentage of Americans are renting rather than buying.
Predictably, the decline was steepest in metro areas where the bubble had expanded to its most absurd proportions: Las Vegas, Phoenix, much of the state of Florida. By this metric, the Dallas area endured the bust relatively well. Its homeownership rate dropped by 4.5 percentage points, which is less than the national average. Zooming in just on the city of Dallas rather than the entire metro area, the picture is slightly rosier, with the homeownership rate dropping by just 3.7 percentage points between 2006 and 2007.
Those numbers, however, obscure the state of homeownership in Dallas. The homeownership rate in Dallas-Fort Worth area stood at 56.3 percent a year ago, well below the national average of 64 percent and lower than all but a handful of major metropolitan areas. Excluding Fort Worth and the 'burbs, the rate for the city of Dallas plummets to just 43 percent.
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A low homeownership rate isn't cause for concern in and of itself. The renters occupying the thousands of new luxury apartment units that have sprung up in Dallas in recent years are doing all right for themselves, as are the two cities with homeownership rates lower than Dallas: New York (31.9 percent) and Los Angeles (37.2 percent). But New York and L.A., behemoth centers of culture and commerce, exist on a different plane from Dallas, whose identity is tied much more closely to the white-picket-fence American dream.
New York City has pretty much always been a city of renters. Dallas has not:
Rather, the evidence suggests that Dallas' low homeownership rate has a lot more to do with large swaths of the population being unable to afford to purchase a home rather than millennials or seniors voluntarily foregoing homeownership. Dallas' poverty rate, which has grown substantially over the past several decades, is 24.1 percent, higher than either New York (20.6 percent) or Los Angeles (22.4 percent).
It turns out that in Dallas, the new normal isn't all that new.