Millennials want to buy a house, but can they afford to in Austin?
Millennials want to buy homes — 12.9 percent of them said so, compared to 12.1 percent of the population overall, according to the Zillow Housing Confidence Index — but can they afford to in Austin? The answer: sort of.
Using the typical rule of thumb that housing costs should not exceed 30 percent of household income, Zillow analyzed the share of homes nationwide to determine affordability for young homebuyers making a salary typical of workers their age. (Researchers used American Community Survey data to calculate the median income of households headed by 23- to 34-year-olds.) As of the end 2014, 70 percent of homes nationwide land in the affordability zone. But it’s a different story in Austin.
Locally, the situation is dire: First-time buyers have access to only 56 percent of homes. That makes Austin the 20th worst market included in the study.
In Dallas, only 64 percent of the inventory is attainable for millennials. Houston fares better, with 68 percent, which is much closer to the national average.
More cities than not experienced dips in home affordability for this group, including the U.S. as a whole, which went from 70.5 percent at the end of 2013 to 69.7 percent a year later. Austin had the biggest drop in that time period, from 65.1 to 56 percent.
Where do millennials have the best shot at home ownership? In Akron, Ohio, home of LeBron James, where they can afford 90 percent of homes. Another Midwestern town, St. Louis, also is friendly to young homebuyers, at 85 percent.
Millennials have it the worst in Honolulu, where a measly 25 percent of housing is attainable. California is only mildly better: Affordable inventory falls below 40 percent in cities such as Los Angeles, San Francisco, San Jose, San Diego, Sacramento and Modesto.