Welcome to Brazos Matters.

I'm Jay Socol and with me is KAMU student content contributor Kaleigh Mazy.

How are you?

I'm pretty good.

How are you doing?

All right.

Okay, so today we're going to explore housing markets, especially housing affordability and even more specifically, affordability for first time homebuyers.

So here's a story that is not very unique.

My son, who is in graduate school, he's 25.

He laments that he may never be in a position to buy a home.

Does that happen to match the sentiment for you or any of your Gen Z friends?

Yeah, absolutely.

You hear some of that?

Yeah.

But do you believe that or or is it just is it just, kind of the sentiment for the moment?

I mean, I definitely believe it.

I'm, I'm thinking, like, in my 50s, I'll be getting my first.

Oh, okay.

All right.

Well, we'll talk about that sort of thing.

We'll see if there's really a cause for worry and, and what is truly happening in Texas.

And right here in Aggie Land, our guest today are both from the Texas Real Estate Research Center at Texas A&M University, research Director Daniel Oney, and research economist Yanling Mayer.

thank you both for being here.

Yep.

Thanks for having us.

Thank you for having you.

That young ling.

Housing affordability has become a phrase that we hear constantly, but it isn't always clear what that means.

People often assume that housing affordability is simply the price of a home.

But what?

Actually like what factors go into affordability?

Yeah, that's a great question.

So when we think about housing affordability, like you said, most of the time people look at the prices.

Right.

But housing affordability is much more encompassing.

You have a price picture, but at the same time for most home buyers, they need to take out a mortgage to finance it.

So mortgage rates is another aspect.

Or piece of the puzzle to housing affordability.

But then, homeownership is more than just making your mortgage payment.

There are a number of ongoing housing related expenses, such as property tax payment and homeowner's insurance and then what have you or the other maintenance expenses.

So yeah, so housing affordability is, is much, broader.

In terms of, what it touches upon.

And then, of course, you also have, on the supply side where, you know, the limited inventory, limited supply and new construction that or bear bears down on affordability.

Daniel, would you add anything to that?

We're often asked by journalists or, you know, license holders, Realtors.

Is this a good year to buy a house?

And housing is so particular and personal.

So my answer is always, you know, it's or are your circumstances different?

You know, your financial circumstances, you know, did you just get married?

Did you just have another child, you know, did you just get divorced?

All of those things really influence when people make a decision to go into the housing market, you know, to buy or to sell.

So it's these averages that we often hear people talk about and we use at the center, things like median home price or average home price.

You know, there's a whole spectrum of prices.

And people are people are entering the market at different places and different price points.

So it's these summary numbers cover up a lot of detail.

So I think Texas has been known as a relatively affordable place to buy a home.

And I'm wondering if it's still is and if not, what forces have, you know, sort of pushed affordability in the wrong direction.

And in fact, I saw, I saw, a, which was released by WalletHub just this morning, was sent out to media outlets that that were ranking, most affordable and least affordable markets.

A Texas city didn't show up until number 70 for them.

And then, other Texas cities really didn't emerge until the one hundreds.

I don't know how credible you tend to find the WalletHub studies, but but I am wondering about whether Texas is still known as a relatively affordable place to buy a home.

So the answer is it's relative.

Those numbers don't surprise me.

I haven't looked at the methodology that they used for that.

But you know, let's say 20 years ago, most Texas big cities and even, you know, our small markets especially were, much more affordable than places in the Midwest or in the southeast US.

Now we're, actually more expensive than places like Atlanta or Chicago once you adjust for income levels.

Now, Texas is certainly affordable compared to California compared to New York.

So we're still cheap compared to the coasts, but not compared to the heartland.

Yeah, yeah.

What do you think?

Yeah.

So I was just looking at, property value appreciation over the last decade from 2015 to 2025.

So surprisingly, I've seen this ten year cumulative price appreciation in Texas has actually outperformed us in general.

Which surprised me a bit because in Texas, we have, a lot of new construction and new construction is relatively, more flexible and, much stronger than many other parts of the country.

So new, amazing new construction, because new constructions can tend to moderate price, the degree of price appreciation.

But despite all that, in the last ten years, we are having, more stronger price appreciation than the US average.

Okay.

Daniel, changing affordability impacts more than just the price tag of the home.

And you talked about the relative, the, you know, it's all dependent on, you know, your personal situations, but how has the average first time buyer changed?

And are there most there?

Is there a certain group that's most affected by affordability?

There's been a lot of discussion about this.

So there is some research that came out nationally.

I'm going to kick it back over to you in a second, because she's actually written about this for us.

The people that buy homes today look a lot like the people that bought homes in the past.

Yeah, they're certainly, you know, different generations, different cohorts are different.

Sizes are different.

They have different assets.

We've seen how, younger generations haven't accumulated assets, maybe at the same rate that, say, Gen X or baby boomers did.

But, but yet, Yanling, you've actually looked at some of that, and it may not be as bad as people claimed.

Right.

So in fact, I know sometimes you hear different, excuse me, you hear different numbers about the participation rate of younger buyers in the housing market.

But, when economists look at two decades of home application and home purchase patterns, they found that the median age of first time buyers stayed relatively unchanged, at about at about 32 to 33 years.

And another corroborating, evidence, for that is the homeownership rate of adults under age 35.

And that number in the last three decades has remained unchanged.

So really, yes.

Today's younger buyers are facing a lot of financial, pressure and challenges to enter the homeownership.

But the rate of homeownership rate has just not changed, has not changed much.

Well, of course, now you ask the question, right.

Why?

Because on one hand, we are talking about all that financial pressures.

And the conversation you two were having about this Gen Z buyers.

And on the other hand, we're seeing numbers of while homeownership has been made relatively stable for that cohort.

So according to industry survey, 78% as much as 78% of Gen Z buyers are getting financial assistance from parents and grandparents.

Is that typical or or is that something new that you're finding?

That's something, recently conducted by some, a few industry.

Sources.

And, home buyers that are entering that, but home on bought a home in 2025.

So it's it in a way, it's something new, kind of going off of that, if, you know, the numbers of people are still the same.

How is the actual home changing for a starter home?

Is that evolved or anything?

That's that's another very interesting question.

So starter homes I think we, we can have a few different ways of discussing these starter homes.

Right.

First, the physical definition of starter homes, I believe that has not changed.

When we think of starter homes.

It's it's smaller homes, likely sitting on a modest lot and even zero lying lot.

Right.

And maybe with typical living area at about 1400 or 1500 square feet, with 2 or 3 bedrooms or fewer.

So that's a physical definition.

I don't think anyone would dispute that.

That qualifies starter homes.

But there's another, aspect to a starter homes that the price definition of start home starter homes.

Right.

That is a different story.

We know home prices have increased, substantially over the last decade or two.

So, so it's like, you know, a tide will lift all boats, right?

So of course, the price of starter homes have increased tremendously to a point that is becoming, unaffordable for many, income younger buyers and households below median income.

Right.

And then there's third dimension to starter homes, which is who are the buyers of starter homes in the starter home segment.

Right.

And we think of, first time buyers, younger buyers, more modest income bias.

But but but there are more to, these buyers.

We have mom and pop investors who are in the starter home segment, entry level, they, they buy and to use as rental properties.

And then you have, in those large metro high, high job growth markets, you have large institutional investors are eyeing or have entered, these starter home segmentation.

Now, I'm curious because I really don't have a great frame of reference.

Is there a healthy amount of housing, in that 1415 hundred square foot range, or are developers building those, or those sort of legacy homes that have existed in traditional neighborhoods for quite some time?

Well, that's probably true.

A lot of the starter homes are legacy homes.

So the golden age of starter homes, was probably after World War two, the mass, development of starter homes.

Right?

So, a lot of those homes are still around.

And in today's housing market, it's it's it's, it's harder it's becoming harder to build starter homes.

After the pandemic, the construction cost has increased a tremendously.

So even even at the for builders at the break, even, pricing level starter homes would be causing a lot more than we think.

How much a starter home should be priced.

Yeah, I would add one thing to that.

So I think that's right.

There's a mix.

So developers home builders do respond to market challenges.

So we've seen it in the past when there's been price appreciation or it's been difficult for people to finance that they'll start building smaller homes.

And we are seeing that in the data in Texas.

But the thing about that second segment that you mentioned, those existing homes that are smaller, there's not a lot of that inventory in Texas in general, or even in cities like Bryan and College Station, because so much of our development and growth happened in the 60s, in the 70s, and the after that immediate post-World War Two boom.

One of the things that people don't, don't appreciate always as well is that this price appreciation, again, like I mentioned, it essentially happened over about 18 months.

So we sort of saw slow and steady price growth in Texas for many, many years.

And then when we hit, 2020, that summer prices basically went up, for 45% or so would be the average around the state.

You know, construction costs were a big part of it.

And then things have leveled off.

So we had a we had a rocket up increase in prices.

And then things have really not become more affordable, except in markets that really overshot, like Austin.

Right, right.

I'm going to take a moment to reintroduce both of you.

If you're just tuning in, I'm Jay Socol.

I, along with KAMU student content contributor Kaleigh Mazy and our guests today are Daniel Oney and Yanling Mayer from the Texas Real Estate Research Center.

The 21st Century Road to Housing Act was recently, signed into federal law, representing kind of a rare moment of bipartisan cooperation and what many consider the most significant housing reform in maybe three decades.

And while it may not address every issue, the scope is certainly noticeable.

And so I'm wondering, Daniel, you first, what are your impressions on how this legislation might influence the Texas housing market?

But there's a lot of details in the legislation.

So some of the some of the elements that I looked at, in earlier versions, I was excited about, manufactured housing.

So there had been some reforms to what we call the HUD code, the Housing and Urban Development Code for, for, for manufactured housing.

And actually, you know, we're looking at, you know, 78% of Texans live in manufactured housing.

That's a major segment of affordable housing that really gets ignored.

So this legislation was going to going to liberalize that a little bit more to allow people more flexibility in terms of of the placement of those homes and the movement of those homes.

So we actually do, do a monthly survey of, of activity in manufactured housing and I'm curious, we used to build a lot more of that in Texas.

So if you go back to the golden age of that was probably back in the 80s, in the 90s, and then it really dropped off.

So, especially in rural areas.

But but the things that we're seeing in legislation, not just at the federal level, but at the state level, to make it easier to build all kinds of housing, even in cities.

Those are those are the answers I think that we're going to have to those are the solutions to a lot of the problem is building more and more variety.

And we maybe talk about Bryan College Station a little bit later.

Sure.

Yanling, anything to add about what you'll be watching for?

Oh, yeah.

So, so, one key provisions in this, a road act, which I'm mostly excited about is, this, federal initiative to encourage or policies to encourage local government to reform zoning and land use.

So to make it easier to build, in, in the, in, in the more accessible, attainable, supply segment and, yes.

So, so when we think about a housing affordability, even though, home prices is most, you know, home prices, the kind of home price, rises we're seeing, were mostly driven by the demand.

Right?

You have the low mortgage rates, you have, credit conditions that tend to stimulate housing demand.

But what, one key, contributor to the, affordability, affordability crisis or affordability situation we are in now is a lack of limited supply.

So this, this new, road act, by, by encouraging, provided through incentives, financial incentives and grants and all that to encourage local communities and local municipalities to, to relax zoning rules, to make it easier to, to to for new construction.

That's something really, exciting to me.

That's interesting.

Can I add to that.

So there's a, there's an important aspect, the incentive nature of the legislation to, to stimulate different kinds of housing.

We talk about housing diversity.

There's there's a product, you know, say a townhouse or a five unit row house that's pretty common in, in our big cities in Texas.

That product used to be more, more common, you know, duplexes four plexes, things like that.

Back in the 1920s, 1930s.

And yet again, Ling and I both lived in, Virginia in prior lives.

And, that, that type of products very common, new construction there.

And that's an area where, you know, probably because it's a college town, College station really stands out.

It has 3 or 4 times the state average in terms of these small multi-unit buildings, you know, for plexus, six plexus, things like that.

And so if you imagine a larger share of the housing stock looking like that, that's how it that's another way to get to affordability in a for sale product.

And here just a couple of stats.

Texas has certainly grown.

And we talked about the first time homebuyers don't look that different.

But if Texas had the same demographic structure today as it had in 20, the year 2000, so 25 years later, we'd have a million more children in the state, you know, and we'd have a million fewer, elderly people, you know, and we'd have, about 400,000 more to parents with children, families, you know, so those those children are here, those two parent with, kid families don't exist.

And that's that's where we those are the people that we built housing for for a long time.

And so now we've got different types of households, more single people, more people that aren't families that are living together.

In diversity in the housing stock is is one of the answers to meet the needs of those types of households.

Okay.

All right.

Daniel, since you mentioned Bryan College Station having, you know, a lot of, duplexes, things like that, what else you know, being home to a big university, what makes this market more unique than others?

Sure.

And it's it's an extreme college town as far as Texas is concerned.

Probably, ahead of San Marcos or Nacogdoches.

Those are the others that have a lot of students relative to the population.

When I was looking at the numbers, the most recent numbers, you know, the, Brazos County really doesn't have that many more apartments than you would think.

Where it really shows up or in those smaller buildings, where it's it's a phenomenally large number of those small buildings, especially in College Station.

It's mostly in College Station.

Bryan's a little bit older, a little bit bigger homes, like you said.

They were built a little earlier.

And then, the other differences, you know, College Station has seen the growth, but the new housing has been pretty expensive, I think 70%.

This is census numbers.

This is not like the median housing numbers we get from MLS.

But, but about 70% of homes in College Station are above 300,000.

You know, that's twice the number that we see in Bryan.

So even within the within the region, the markets, the cities are very different.

So with traditional neighborhoods continuing to transition, at least here to game day housing and these massive student rental housing units do, do either of you see a time when a trend like that reverses, or are these traditional neighborhoods sort of becoming a thing of the past again in a university community like ours?

And how about I just start with you, Daniel, and then we'll go to, to here, you know, so so student housing is a subset of multifamily, you know, and you can see all the the cranes, you know, if you're driving on university.

I was in, I was in a small town in East Texas, and a woman came up and said, she was excited.

We were there to talk, and she said, are you guys at the real estate center?

Are either you the ones that, Is it your fault that the college station looks like Hong Kong now?

I said, no, we really don't.

We don't really get involved in the development.

But, You know, student housing is really driven by university enrollment.

And, you know, A&M is just done some we did some studies recently and we're going to tap the brakes a little bit.

But, you know, as long as the university grows, you're going to, you're going to see those housing trends continue, right?

Hey.

Yeah.

So, I've heard other anecdotes from, other sec.

Building schools or college towns about how, a lot of the housing activity could be driven by, you know, excess a successful football program.

Right.

And when when the football team is doing well, you have more, you know, you have more student enrollment.

You want to be part of the university and you have more alumni engagement, right?

And so, so really, for a for a college town, I think one key, like College Station, one advantage for the housing market is because the major employer is a university.

So the trajectory of universities growth, enrollment, employment, university related investment.

So these are the key drivers of, the local economy as well as the housing market.

So which which also makes local housing market less cyclical and more resilient.

You know, those parent, purchased homes, investor homes or you know, occasional weekend occupancies and, so in some way, from economic perspective, those purchases take, housing units out of their full time, owner occupancy.

Yes.

And they may impact, prices, maybe at the margin.

But fundamentally, I think the trajectory of the housing is going to depend on the economic, the economics of the university, the growth of the university.

You know, sometimes, our show, which last 28 minutes is enough time.

I get the feeling like this was not enough time for us, because I think Kalrigh and I both have so many more questions, but we're we're beginning to wind down in the time we do have left.

We have about three minutes left.

Kaleigh, you want to throw a final question at them?

Yeah.

You know, I'm, you know, young and trying to go towards buying, you know, a first home sometime in the future.

So what, what advice would you give someone who is looking to buy their first home?

I start, yeah.

So we've often asked about, you know what advice we have for, for the, for the home buyers, for the aspiring first time buyers.

Right.

So one, one, I guess I would always, you know, my advice has always been, know your finances, right?

And, have control over what?

You know, what you have control over.

And try not to time the market because home prices, inventory and, you know, all that fluctuates, interest rates.

But what what you have control over is your finance.

So, I think we, as, you know, we need to honestly and ask ourselves, can I comfortably afford that or that cost that comes with homeownership after I take care of other daily housing expenses, right.

Because sometimes, because we hear a lot about, you know, housing or homeownership being an investment.

But I think sometimes it's, less emphasized or not emphasized enough.

Having a home is, is more, or first about this financial responsibility.

Right.

So, so know your finances, and, you know, make sure you, you, you can comfortably afford, ongoing expenses.

And those are the things I would, look at most instead of trying to time the market.

Daniel, you you want to take that to the final minute?

No, that's excellent advice.

And that's a that's, maybe a more intelligent answer than than I was given earlier about, you know, when somebody says, is it a good time to buy a house?

It will it may or may not be for you.

Yeah.

I think the the only thing I would add to that is, is to really study those other expenses.

So in Texas, for example, we've seen dramatic increases in insurance rates.

At the same time, though, the legislature has been pretty generous with, homeowners in relaxing property taxes.

So it's or the legislature gave some and then the insurance basically took it away and it was a wash.

But having an idea of what those expenses are, and that there is a, there are opportunities through home ownership that you don't get through renting.

Entrepreneurial people often, you know, use the equity in their homes to start a business.

So there's are other factors, but a home is basically a place to live.

Think about it that way.

And you want to make sure you have that secure, long term.

Okay.

And so, can you give us, maybe web address or how we can sort of follow the work from the Texas Real Estate Research Center and, and learn more about this topic?

Sure.

Well, there's, there's a couple of specific ways.

So our website is, it's a t r e r c Texas real estate Research Center.

trerc.tamu.edu Okay, and then we do a quarterly journal on real estate research, the summer issue that, just came out is exclusively focused on housing affordability.

Perfect, perfect.

Well, Daniel Oney, Yanling Mayer from the Texas real estate Research Center.

Thank you both for being here with us.

Really enjoyed the conversation.

No, it was great.

Thanks for having us.

You bet.

Pleasure to be here.

Brazos Matters is a production of Aggieland's public media KAMU-FM & KAMU-TV, members of Texas A&M Division of Community Engagement.

Our show is engineered and edited by Matt Dittman.

We appreciate you being with us.

Thank you for watching or thank you for listening.

For Kaleigh Mazy, I'm Jay Socol.

Hope you have a great day.