It’s interesting that today more and more millennials are still living at home with their parents well after their college years. Those of us that are a older were always taught that a college education was the key to the American dream.
Go to college, get your degree and the keys to the kingdom will be yours. That’s not really the case anymore. More and more college graduates are finding it difficult to get a job that is “good enough” to buy a home.
Even though we have seen a steady decrease in unemployment in the US, home prices are so high in many areas millennials are forced to wait longer and longer to realize their dream of home ownership.
It’s interesting to note in this article that median income for millennials is $35,000. This makes it almost impossible for them to afford to buy a house in many parts of the country.
Today I have a really interesting guest post from one of our friends at Zillow, Miriam Bornstein. She has also put together some great infographics to go along with the article.
When you relate these findings to real estate investing, you will see many challenges but also some areas of great opportunity.
The Problem for Millennials
In honor of America's independence, Zillow released data on the top 10 cities where millennials can afford to live alone. These findings are based on the percentage of millennials living alone, median income values, the share of affordable homes and employment growth.
In cities like Austin and Richmond, year-over-year employment growth is up by nearly 4 and 5 percent, presenting a strong labor market, making it a desirable destination for millennials. And, in Pittsburgh, the median income is $40,000, and 17 percent of homes are available to millennials. These numbers are quite promising since the median salary for millennials across the United States is $35,000, and 11 percent of homes are affordable to millennials on a single-income salary.
What Are the Best Cities For Millennials for Home Ownership?
Below is a list of the top 10 places for millennials to live independently.
- Richmond, VA
- Buffalo, NY
- Columbus, OH
- Virginia Beach, VA
- New Orleans
- Austin, Texas
- Kansas City, MO
- Oklahoma City
What about My Hometown Louisville, KY?
Curious about Louisville's home prices and data? The median home value in Louisville is $111,100. Zillow predicts that home values will rise another 4.1 percent within the next year. While Louisville's median home value is $75,000 below the median value in the United States, tenants can expect to spend anywhere from 18 to 27 percent of their income on rent.
Even though Louisville didn’t make Zillow’s list of top 10 cities, the home prices in my area are still quite affordable when you compare them to other parts of the country. Like most other people, I still believe that home ownership is the way to go if you can possibly afford it. Owning a home just has so many benefits compared to renting.
For real estate investors, the rental market is still very strong. I don’t see a demand for rental houses declining anytime soon. Millennials that can’t afford to buy will be looking for quality rentals in every part of the country.
If you currently live and invest in one of the less affordable areas for millennials, it might be time to expand your business and consider some other more affordable areas for your projects. It looks to me like this group of folks needs a solution for their housing dilemma that we are uniquely able to provide.
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