Matt Vatthauer, GIS Aide/Research Analyst
Recent research and media attention suggests the Millennial Generation differs from prior generations of Americans in many ways. This group is defying traditional American lifestyle choices by attaining higher levels of education, living with their parents as adults for longer periods, marrying later in life, and having children later in life. In fact, many researchers believe that Millennials would prefer to own their own homes in the future, however their current financial situation limits where they can live. How do demographers quantify these lifestyle choices that today’s young adults are making and forecast the societal impacts in our cities and towns of tomorrow?
Both the Pew Research Center and the U.S. Census Bureau loosely consider anyone born after 1980 to roughly 2000 to be a Millennial. The oldest Millennials are in their mid-30s while the youngest cohort is entering their late teens and early 20s. Most research and data collected on the Generation is based on the older cohort aged 25-34.
The lack of wage growth and economic challenges facing young adults today is likely contributing to some of the lifestyle changes arising in recent research. Despite having more education, today’s young adults are only earning slightly more than in the late 1980s and early 1990s.
The percentage of young adults living with their parents has increased. The Dallas Morning News reports that approximately 21 percent of Millennials nationwide still live at home with their parents. This is 13 percent higher than a decade ago. Despite earning less, Millennials are saving a greater percentage of their income compared to older workers. The Dallas Morning News also reports that sixty-two percent of Millennials surveyed are saving more than 5 percent of their pay for retirement, emergencies, or other financial goals, compared to 50 percent of consumers between ages 30 and 49. At the same time, the amount of debt Millennials are carrying has also decreased.
While most millennials, especially those 25-34, are still not purchasing homes as quickly as previous generations, they are the largest group purchasing homes today. The National Association of Realtors and Houston Chronicle reports that Millennials purchased 35 percent of homes in 2015. Generation X, ages 36 to 50, were a distant second purchasing 26% of homes on the market. For those Millennials searching for new homes, prices appear to be affecting where they buy. According to a recent real estate article in The Houston Chronicle, Millennial homeownership rates were five percent higher in cities where median home prices were twenty percent or more below the national median. Texas cities have traditionally been more affordable markets especially for the entry-level homebuyer. As homes in Texas cities increase, half of all Millennials pursuing home ownership are choosing to live in the suburbs due to higher home prices in central cities. However, the desire to live in denser urban environments, a trend that began in the United States in the 1990s, continues as Millennials are leasing apartments longer.
Increasing housing values in city centers and the desire of Millennials to live in these areas will ultimately affect future public school student enrollments. In 2015, 25 to 34 year olds in Dallas I.S.D. made up 18.4 percent of the population—compared to Highland Park I.S.D. where 25 to 34 year olds made up 5.5 percent of the population. High home values in desirable locations such as the Park Cities create an entry barrier for lower-earning Millennials. Similarly, in central Houston I.S.D., public schools are highly regarded in Bellaire, Braeswood Place, Garden Oaks, Oak Forest, and West University Place. With most available homes selling between $800,000 and $2 million in these neighborhoods, most Millennials are unable to purchase homes. The schools in many of these neighborhoods are also at capacity so buyers may look far out toward the suburbs to purchase more affordable homes. In suburban regions with more affordable new housing, Millennials are a larger segment of the population. In the north suburbs of Dallas, Millennials aged 25 to 34 in Frisco I.S.D. made up 11 percent of the population where new, more affordable homes are plentiful. In nearby Lovejoy I.S.D., higher home values and the lack of new construction make it difficult for younger homeowners to enter the housing market. In Lovejoy, 25 to 34 year olds made up only 4 percent of the population.
Though Dallas I.S.D. currently has one of the largest percentages of people aged 25 to 34 in the region, it remains to be seen if this District will keep this young adult population after they have children of school age. The Millennials in Dallas tend to move to the suburbs once they desire backyards and schools. In Houston, desirable neighborhoods with large lots and highly regarded schools are plentiful but come at a cost many Millennials cannot currently afford. Many move to the suburbs while others put off having children until they can afford the lifestyle they desire. It remains to be seen if new Dallas condos and Houston’s townhome neighborhoods will be places families with students call home in the future.
(Houston Chronicle, March 10, 2017, March 29, 2016; The Eagle, January 14, 2017; Dallas Morning News, April 6, 2016 and May 20, 2016)