For Millennials, is it Even Worth Buying a Home?Return to Blog
Most people find it ideal to purchase a home they want to live in for decades, maybe even forever. But with the rising struggle to overcome the daily cost of living, student loan debt, and almost fair waged jobs, Millennials still statistically face far less chance of homeownership than their generational predecessors.
Nationally, a millennial’s likelihood of owning a home increases by 9% if their parents were also homeowners. While 39.5% of caucasian millennials own homes, the black homeownership rate is just 13.4%, the Asian ownership rate is 27.2%, and the Hispanic ownership rate 24.6%. “Left unchecked,” the Urban Institute study declares, “current trends will result in even greater wealth disparities among white, black, and Hispanic millennials.”
Observing beyond race, for millennials to be financially ready to retire at age 65 they will need to save a lot more than 15% of their net income; more like half of their paychecks. The average household income for millennials in the Bay Area is $45,401, while the average income for all adults totals to $81,783. So when factoring in loan debt, rent costs that average to at least 30% of millennial net incomes, ethnicity, parental homeownership, and having a decent social life. Your initial answer to this article would be “absolutely not.”
However, just over one-third of all home purchases were made by Millennials, who held a market share of 36% over the past year. They are accomplishing this in a variety of ways, which include mortgage loans, family loans, saving since college, and sheer luck.
Considering housing costs in the Bay Area steadily declining, and new housing development increasing about 82% over the next 3 years. For millennials who are capable of purchasing a home, the time is coming soon; if not right now.
If you or a millennial you know are interested in buying a new home, or looking for tips on how you can enter the real estate industry. Please schedule a call with Advent Properties’ Executive Vice President and Broker-Associate, Darryl Glass.