Bloomberg Ranks Most and Least Affordable Housing Markets for Millennials
It’s no secret that the dream of homeownership has become increasingly elusive for America’s younger generations. But, depending on the city, some millennials are faring much better than others. With that in mind, Bloomberg recently pulled data from the U.S. Census Bureau, Zillow Group, Inc., and Bankrate.com to determine the leading cities where millennials have been practically priced out of the market.
The good news is that there are 37 metropolitan cities where millennials' dream of homeownership remains alive and well. The bad news? Not a single one is located in California. In fact, the Golden State tops Bloomberg’s list of housing unaffordability.
Take San Jose, for instance, which took the #1 spot for a lack of affordability. The median salary required to purchase a home in San Jose is $133,377, while the median earnings for 18 to 34-year-olds is just $53,215. San Francisco didn’t fare much better. It comes at #2 with an affordability gap of $60,975. It was followed by three other California cities: Los Angeles, San Diego, and Sacramento.
To complicate matters, Bloomberg’s calculations assume that millennials have already saved up 20 percent for a down payment. But, as senior Wells Fargo economist Mark Vitner explains, that is not always the case.
Many millennials "don't have the money for a down payment or can't afford to buy where they want to buy," Vitner says. "It's tougher to buy a home in the city."
According to Bloomberg, millennials would have better luck venturing outside the West Coast. The most affordable housing markets for 18 to 34-year-olds include Detroit, Buffalo, Pittsburgh, and Indianapolis.
Read more about the most and least affordable housing markets for millennials and see a full list here.