Most millennials have the desire, but not the means, to buy a home
About eight of every 10 millennial renters want to purchase a home, but nearly three-fourths of them (72 percent) can't afford to do so, according to a survey by Apartment List. Among respondents in a recent survey, 67 percent said they plan to wait at least three years before buying a home.
A comparison of metro areas shows Ogden-Clearfield, Utah with the largest percentage of millennial homeowners. Abodo an apartment locator site, found 51 percent of young adults in that metro area own a home, well above the national figure of 32.1 percent. The study showed Seattle in 30th place among large cities (102nd place overall), with only 29 percent of millennials being homeowners.
Rounding out the top five metro areas with the highest rate of millennial owners are Grand Rapids-Wyoming, Mich. (45.3 percent), Des Moines-West Des Moines, Iowa (43.6 percent), McAllen-Edinburg-Mission, Texas (43.3 percent) and Minneapolis-St. Paul-Bloomington, Minn. (42.4 percent).
The Los Angeles-Long Beach-Anaheim area had the distinction of having the worst rate of millennial homeownership at only 17.8 percent. Others on the "bottom 5" list were Urban Honolulu (18.3 percent), San Diego-Carlsbad (19.8 percent), New York-Newark-Jersey City, NY-NJ-PA (19.8 percent) and San Jose-Sunnyvale-Santa Clara (20.2 percent).
In its survey, Abodo noted more young adults buying homes in small to midsize cities in the Midwest, South and Southwest, and fewer purchasing houses in expensive coastal cities or college towns like Madison, Wis., and Chapel Hill, N.C.
Researchers also compared equitable values of homes owned by millennials compared to MSA averages. Eight of the 10 MSAs with relatively equitable home values for millennials are located in the South and Midwest, with Texas scoring particularly well. The Spokane-Spokane Valley area was one of only two cities outside the South and Midwest on the list. Bakersfield, Calif. was the other.
Abodo (whose users are predominantly 18-34 years old) also compared the time it took millennials to save for a down payment. Assuming they set aside 15 percent of their rent-bearing incomes per year, the average saved-up time for buying a house valued at $278,337 is 15.6 years. Of the 100 largest MSAs, the shortest saving time was found to be 6.9 years in Youngstown-Warren-Boardman, OH-PA, followed by Dayton, Ohio.
Los Angeles had the longest duration median-earning millennials saving 15% would need to save up for 32.2 years to afford a 20% down payment of $112,033. Seattle area millennials would need to save for 14.5 years to buy a home with the average value for their demographic.
In 2015, 1.4 million homebuyers were under the age of 35, according to The 2017 State of the Nation's Housing report from the Joint Center for Housing Studies of Harvard University. Researchers noted that figure is "well below pre-boom levels." It marked a 5 percentage point drop between 2001 and 2014, while the number of homeowners over age 55 jumped by 13 percentage points.