Earlier this week, UrbanTurf explored the conclusions of a new study from Urban Institute that examines why the millennial home ownership rate is lower than previous generations. Today, we take a look at the study's parsing of how millennials' preferences on where to live have contributed to these lower rates of homeownership, particularly in the DC area.
A major contributor to the lower homeownership rate among millennials with higher levels of educational attainment is a preference for living in urban areas, which often have an inelastic housing supply. This is particularly true in the DC area, where millennials' migration patterns have mirrored the shift in median home prices.
"In Loudoun County, a suburban county an hour outside the city center, the share of 18-to-34-year old residents decreased 5.8 percentage points, from 25.5 percent in 2005 to 19.7 percent in 2015," the report states. "The county saw median home prices decline from $499,900 to $441,000. In contrast, both DC proper and Arlington County, denser counties toward the city center, saw their 18-to-34-year-old population share increase 8.2 and 6.6 percent, respectively. In DC proper, the median home price rose 29 percent between 2005 and 2015, and in Arlington County, home prices rose 22 percent."
The above graphs illustrate that shift in the distribution of home prices, toward the seven-figure range in DC proper and Arlington County over the last decade, compared to a shift in the opposite direction in Loudoun County. Additionally, the lack of affordable housing for rent in city centers hinders millennials' ability to save up to make a down payment on a home purchase.
The recommendations Urban Institute offers to help increase the rate of homeownership among millennials would be beneficial to more than just millennials, including more lenient zoning that would increase the supply of affordable housing (a well-documented need in DC proper) and using rental payment history as a factor in determining credit-worthiness (a concept floated in DC Council, albeit only in reference to public housing residents).
This article originally published at https://dc.urbanturf.com/articles/blog/how-desiring-to-live-in-dc-is-hindering-millennial-homeownership/14223.
Most Popular... This Week • Last 30 Days • Ever
Harry Wardman is responsible for developing huge swaths of northwest DC, from row hou... read »
The neighborhoods where prices have risen the most have one thing in common.... read »
UrbanTurf reached out to a local economist to see which direction home prices are hea... read »
Here are some precautions to take before buying real estate with a buddy.... read »
An updated look at the residential units on the boards at Union Market.... read »
With interest rates reaching their highest levels in 14 years, it is critically impor... read »
Before deciding to build an addition to your rowhouse, find out whether you'll need t... read »
A stately five-bedroom Woodley Park house has been home to not one, not two, but thre... read »
A look at the residential projects in the works within a block or two of Dave Thomas ... read »
The most active developer in the Union Market has more plans on the boards.... read »
With this weekend's DC houseboat tour a day away, UrbanTurf thought it only fitting t... read »
President Obama travels to Denver this morning to sign the stimulus bill that has bee... read »
In this week's installment of Ask An Agent, a reader wonders if there is a rule for h... read »
As The Wharf prepares to begin construction, DC's houseboat community heads to its ne... read »
In this week's installment of Ask An Agent, a reader asks a fairly common question th... read »
DC Real Estate Guides
Short guides to navigating the DC-area real estate market
We've collected all our helpful guides for buying, selling and renting in and around Washington, DC in one place. Visit guides.urbanturf.com or start browsing below!
Intro guides for first-time home buyers
Awesome and unusual real estate from across the DC Metro