Where Texas millennials are buying homes — and how much they cost
For years, the percentage of 18- to 35-year-olds who own homes has been shrinking — by nearly 20 percent between 2005 and 2015. But recently, according to apartment-search site Abodo, millennials have been making progress in becoming homeowners, with a slight uptick in young adult owners between 2014 and 2015.
To be clear, the numbers are still weak — but encouraging nonetheless.
So where, exactly, are these millennial homeowners? According to Abodo's Millennial Homebuyers report, for the most part, they're scattered around the Midwest and South. Of the 100 largest metropolitan statistical areas in the country, Ogden-Clearfield, Utah, had the highest percentage of millennials who own: 51 percent. On the other hand, the metro with the lowest percentage is absolutely no surprise: Los Angeles-Long Beach-Anaheim with 17.8 percent.
The Lone Star State showed up in the rankings as well: McAllen-Edinburg-Mission took fourth place for highest percentage of millennials who own, coming in at just over 43 percent. As a whole, 30.5 percent of millennials are homeowners in the state.
The stretch of I-35 between Austin and San Antonio is one of the fastest growing parts of the country, with over 100,000 new residents since 2010. The cities at either end are the impetus for a lot of that growth, with booming economies and rampant development.
Austin has always been a magnet for the young, but its thriving tech community has driven a new wave of growth to Texas' capital. According to the Austin Chamber of Commerce, from 2005 to 2015 Austin's population increased by almost 38 percent. In 2015, 6.4 percent of Austin’s population were new residents, many of whom are millennials.
Almost three-quarters of Austin’s millennial residents rent. Only 26.5 percent of millennials in Austin own homes, which means that Austin ranks No. 89 out of the top 100 largest metros. The average millennial home value is $247,319, about 81 percent of the area average.
Are millennials in Austin renting because property values are high? Maybe. But it could also be the area is full of transplants who haven't yet gotten a feel for Austin's tight market. And certainly the 39,000 millennial college students at the University of Texas skew the numbers a bit. Most college students aren't in the market for a mortgage.
Millennial homeownership rates shift the closer you get to the Alamo. In San Antonio-New Braunfels, 29.2 percent of millennials own homes. Property values are cheaper than they are in Austin; millennials homes have an average value of $192,208, and that's 97.1 percent of the average area value.
Still, San Antonio-New Braunfels comes in at No. 71 for millennial homeownership. That indicates that renting, not owning, is facilitating much of the explosive population growth in South Texas.
The two other large Texas cities fall somewhere between: Houston-The Woodlands-Sugar Land takes No. 74 with 29.1 percent of millennials owning homes, and Dallas-Fort Worth-Arlington ranks No. 77 with 28.7 percent.
Despite the fairly low rankings for Texas' largest cities, the state scored well overall, especially when it comes to millennial down payments and home values. It takes Texas millennials an average of seven-and-a-half years to save up a down payment — which, on the whole, is a fantastic number, given that the national average is 15.6 years.
When Abodo measured how much millennial-owned homes cost compared to the average home price in each metro, Texas scored three places in the top 10 for most equal value and had no presence in the bottom 10.
At No. 1 nationwide is El Paso, where the average millennial-owned home cost 104.8 percent of the average area home. San Antonio-New Braunfels came in at No. 3 with 97.1 percent, and McAllen-Edinburg-Mission ranked No. 9 with 90.4 percent.