Millennials are finally jumping into the home market.
Data from the National Association of Realtors show that millennials now represent the largest share of the home buying population nationally, at 34%.
At the same time, however, the share of homeowners under age 35 shrunk 5 percentage points between 2001 and 2015, according to a new study real estate information site ABODO. The ADOBO study also shows that millennials are having an especially hard time buying homes in certain parts of the country, at the same time that they’re buying a disproportionally large percentage of homes in other regions.
So where are they buying? Millennials face fierce affordability issues in dense coastal metro areas, ABODO says. However, they represent a very large percentage of home sales in the Midwest and Southwest.
The main reason millennials are a small percentage of buyers in certain markets is pretty obvious: House prices are sky-high. A millennial with a typical income might have to save for decades in order to have enough for a solid down payment on a home, ABODO finds. For instance, in Los Angeles, median-earning millennials saving 15% annually would need to wait 32.2 years to afford a 20% down payment of $112,033.
Millennials are finding it much easier to afford homes in the Midwest and Southwest. Yet overall young people today are finding it much harder to buy houses compared to previous generations, and high prices aren’t the only reason why this is so.
“Young adults used to account for a much larger portion of homeowners than they do today — the prevalence of college, mounting student loan debt, and an increasingly tight housing market are slowly pushing back the age of first-time homebuyers,” ABODO reports.