Homeownership in Dallas area falls as millennials balk at buying (Irving: for rent, insurance)

[serger]

Originally Posted by happycrow

Perhaps my definition of "middle class" is further to the left of the bell curve than most.

Median household income here is just under 60k. What's on the market in DFW that is within range for a responsible buyer at that income?

Well, the median house over the four "main" counties is above 300k. So...

[EDS_]

Originally Posted by happycrow

Perhaps my definition of "middle class" is further to the left of the bell curve than most.

Median household income here is just under 60k. What's on the market in DFW that is within range for a responsible buyer at that income?

Maybe.


Some points:

Dallas median household and median family incomes are both well above the Texas and national averages and that's before taxes.

Pew Research defines middle class as 67%-200% of median HH income. That's a pretty solid definition IMO.

But there a lots of details........
Renters pull MHHI down significantly relative to homeowners. They tend to be much younger, less skilled and far less well paid plus a greater proportion of renters are single and thus one earners HHs.

I like to look at Median Family Income for a lot of reasons.

Dallas Median Family Income is $68,957 (2013, new numbers in Sept.).

So a good working local definition of the local middle class would be families that earn between $46,201 and $137,914. That sounds pretty reasonable to me.

A guy I know makes about $55K and his wife does not work, although she may look for work later this year. They have a mortgage on a very nice (pretty, perfectly maintained home, decently sized lot with old trees etc.) home in Garland. Their kiddo attends a really solid school in GISD.

It can be done.

_______________

Local housing costs.......according to a brand new Case-Shiller Report index about RE prices in the 20 largest cities we see the following.

The average indexed RE prices for March across all 20 cities is 175.20. Dallas is 147.12. The US national average is 168.03. The only big cities with lower housing costs in March were places like Detroit, Cleveland, Atlanta. It's also important to point out that Dallas is a top 10 city, CS's Top 10 index is 190.04.

______________


Your problem is it's virtually impossible to find a very large vibrant metro that pays higher real wages and has less expensive housing. And you simply will not find all of that without dropping to a smaller city - possibly Nashville, maybe a couple of cities in Wyoming. People are moving here for a reason.

[NoClueWho]

Originally Posted by Gordon Bombay

I'm 26 and make decent money for my age--enough to be able to afford to live in Uptown in a one bedroom apartment that overlooks some of downtown. There's no way I want to squander my youth by living in suburbia hell just to have one huge financial obligation.

LOL, but you're 26!!! Get back to us and let us know if you still feel that way when you're 36 and married with children and need 4 bedrooms and a yard for your children to play in, need to find an area that's safe and affordable yet still has good schools, etc.....

[EDS_]

Originally Posted by Mentallect

LOL, but you're 26!!! Get back to us and let us know if you still feel that way when you're 36 and married with children and need 4 bedrooms and yard for your children to play in, need to find an area that's safe and affordable yet still has good schools, etc.....

I laughed out loud at that one too.

[TheOverdog]

Get back to us and let us know if you still feel that way when you're 36 and married with children and need 4 bedrooms and a yard for your children to play in, need to find an area that's safe and affordable yet still has good schools, etc.....

People live in different places at different ages. How you live at 26 versus how you live at 36 versus how you live at 86 should be different as you have differing needs at each age. None is more 'correct' than any other.

[happycrow]

*nod-nod*

Pew also defines an individual at 66k or a family of 4 at 132k as "upper income," and what I would consider to be definitely upper-middle-class. So yes, it appears we definitely have a case of dueling definitions. I consider a responsible purchaser to be one not exceeding 3-1 DTI on a home purchase. (not defining "decent areas," that was somebody else's issue, not mine. I rather like where I live; would like it to be more walkable, but that's a zoning issue, not a house-price issue).

So if you're taking the median family income and looking at a house in the 150-200k range...well, we already had a thread about the availability of those recently, and how hard they are to get because the people who'd like to sell are afraid of not being able to get back into anything after they do. I've been watching this as I see people who want to start families having trouble getting out of apartments and into houses because this is the range they can afford, and no better.

If you take 100-130k as "middle class" rather than upper-middle-class, and consider a 300-400k house to therefore be reasonable/affordable, then clearly what I wrote above has no validity at all.

[bencronin04]

My wife and I have no student debt or CC debt (just one that I get a tank of gas on a month and pay off in full). We do have two car payments. If we bring in around 120K a year(before taxes) we should be looking at 300K-400K houses? That just seems crazy to me! We are trying to focus on 200K-275K TOPS, if we decide not to take any "help" from my parents.

[synchronicity]

Originally Posted by EDS_

Local housing costs.......according to a brand new Case-Shiller Report index about RE prices in the 20 largest cities we see the following.

The average indexed RE prices for March across all 20 cities is 175.20. Dallas is 147.12. The US national average is 168.03. The only big cities with lower housing costs in March were places like Detroit, Cleveland, Atlanta. It's also important to point out that Dallas is a top 10 city, CS's Top 10 index is 190.04.

Just as an FYI, those numbers do not reflect the same thing for each city. Rather, they are relative to a baseline value of 100 FOR EACH CITY in January, 2000.

For example, here's Chicago: S&P/Case-Shiller Chicago Home Price Index - S&P Dow Jones Indices
Here's Dallas: S&P/Case-Shiller Dallas Home Price Index - S&P Dow Jones Indices

Here's New York: S&P/Case-Shiller New York Home Price Index - S&P Dow Jones Indices

As you can see, each city had a value of exactly 100 in January of 2000, but I think we can agree that those 3 cities did not have identical housing costs in that month.

I'm not arguing with your main points at all, but just letting you know that you're using the Case-Schiller indices incorrectly in that post to make your points. What the indices DO show is that DFW home prices have APPRECIATED less than those in most other major metro areas since January, 2000. As it happens, it is likely that DFW prices were also lower than those in most of those cities back then, and so would remain lower. That should buttress your argument, but in a slightly different way than you were stating.

TL;DR - a "150" case-schiller index in one city is not an absolute value but only shows price relative to 15 years ago, so a 150 in one city could mean something totally different from a 150 in another.

[aggie972]

Originally Posted by bencronin04

My wife and I have no student debt or CC debt (just one that I get a tank of gas on a month and pay off in full). We do have two car payments. If we bring in around 120K a year(before taxes) we should be looking at 300K-400K houses? That just seems crazy to me! We are trying to focus on 200K-275K TOPS, if we decide not to take any "help" from my parents.

Yeah, that's too high. I've read you shouldn't go over 28% debt to income, and that's your monthly mortgage payment, including principal, interest, real estate taxes and homeowners insurance. Obviously how big of a downpayment you've saved will impact how much house you can buy and still stay within that ratio.

[Aceraceae]

Originally Posted by aggie972

Yeah, that's too high. I've read you shouldn't go over 28% debt to income, and that's your monthly mortgage payment, including principal, interest, real estate taxes and homeowners insurance. Obviously how big of a downpayment you've saved will impact how much house you can buy and still stay within that ratio.

28% would put him at 33,600 for mortgage or 2,800 a month.