Millennials are Flocking to U.S. Cities Where They Can't Afford a Home!
Young people in the U.S. are flocking to cities where eye-popping real-estate prices mean they may never be able to afford to buy a home.
For example: nearly 2,500 moved to New York's Battery Park City, where median home values are also quite high. Meanwhile, 67 percent of younger millennials and 61 percent of older millennials have less than $1,000 in savings, and a growing share have nothing saved at all.
Using data from Zillow, CNBC Make It identified median home values for the top 10 places RENTCafé determined that millennials moved between 2011 and 2016.
While housing prices are close to the median in a couple of these places, they're above the national median in eight of the 10 ZIP codes. And in three of the 10 ZIP codes — located in notoriously pricey states like California and New York — typical homes can cost well over $1 million.
Here are the top 10 places with the largest increase in millennials over that five year period, and the median home values there:
Los Angeles, California
Neighborhood: Downtown, 90014 Percent of millennial increase: 91.4 Number of new millennials: 3,000 Median home value: $533,500
Los Angeles, California
Neighborhood: Downtown, 90013 Percent of millennial increase: 60 Number of new millennials: 4,700 Median home value: $567,200
New York, New York
Neighborhood: Battery Park City, 10282 Percent of millennial increase: 54.5 Number of new millennials: 2,300 Median home value: $825,000.
Portland, Oregon
Neighborhood: Kerns / Laurelhurst, 97232 Percent of millennial increase: 51.8 Number of new millennials: 5,700 Median home value: $600,700
New York, New York
Neighborhood: Lincoln Square, 10069 Percent of millennial increase: 47.7 Number of new millennials: 2,200 Median home value: $1.9 million
Jacksonville, Florida
Neighborhood: Riverside, 32204 Percent of millennial increase: 45.3 Number of new millennials: 3,000 Median home value: $194,600
Los Angeles, California
Neighborhood: Mid-Wilshire, 90048 Percent of millennial increase: 38.9 Number of new millennials: 10,300 Median home value: $1.7 million
Philadelphia, Pennsylvania
Neighborhood: Kensington, 19125 Percent of millennial increase: 37.4 Number of new millennials: 11,200 Median home value: $265,000
San Francisco, California
Neighborhood: Castro, 94114 Percent of millennial increase: 37.4 Number of new millennials: 12,500 Median home value: $1.9 million
Washington, D.C.
Neighborhood: Southwest Waterfront, 20024 Percent of millennial increase: 37.2 Number of new millennials: 5,100 Median home value: $403,300
To generate its national rankings, RENTCafé looked at ZIP codes with total populations of over 600,000 residents. To generate its rankings by state, researchers analyzed ZIP codes in the 250 largest U.S. cities. ZIP codes with less than 1,000 millennial residents were eliminated, as were ZIP codes that overlapped with University Campuses and U.S. Military Bases or those that contained penitentiaries and correctional facilities.
About half of those born between 1980 and 1995 still rent, according to one recent study, because expenses like student loan debt, in conjunction with high down payments, make it hard to afford a home. The extravagant cost of renting, especially in trendy cities, makes it even harder to save.
Data from Apartment List in 2017 showed that, although 80 percent of millennials would like to purchase real estate, very few are in a good position to buy, largely because they have nothing put away.
Given their current savings rate, millennials are 10 years or more away from home ownership, especially in more popular cities, Apartment List concludes. Young residents of pricey San Jose, California, will have to be exceptionally patient: Odds are they won't be in a good position to buy an apartment there for "almost 24 years."
Since housing prices and the cost of living can vary widely based on where you live, it's good to plan ahead. If you're looking to buy a home, be sure you're ready to transition from renting and consider some of the markets where homes are most affordable for millennial buyers. Southern and Midwestern towns tend to be good bets.
