Where can millennials afford homes?

by Ryan Smith04 May 2015
Millennials looking for an affordable home in Southern California may want to think about moving.

According to a new study by Zillow, just one in four homes in Los Angeles and Orange Counties are affordable to a typical millennial household. Among the 96 largest housing markets, only Honolulu is less affordable to young people.

In fact, none of the larger California metro areas is particularly affordable to millennials, according to Zillow. San Jose had the largest share of inventory that would be affordable to a typical young household at 38%. In Los Angeles, meanwhile, just 26% of homes are affordable to millennials.

This isn’t a nationwide problem. Across the U.S., about 70% of for-sale inventory would be affordable to a typical millennial household. In Akron, Ohio, millennials could afford about 90% of the for-sale inventory.

Why is L.A. such a tough market for young people? Two reasons, Zillow senior economist Skylar Olsen told the Los Angeles Times: High home prices and relatively low wages.

“L.A. is just one of those areas where income growth has not been very strong and yet housing price growth has been fast,” she said. “L.A. almost always comes in at the top of the list for unaffordability.”

So where should millennials live if they’re looking for affordability? Akron, with its 90% affordability list, tops the list. Millennials could afford 85% of for-sale inventory in both Scranton, Penn., and Des Moines, Iowa, and 82% of for-sale inventory in Cincinnati.
 
 

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