Dive Brief:
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As millennials migrate to hot markets like San Francisco, San Jose, New York City, Seattle, Denver, and Washington, DC, they’re finding good jobs—and home prices that are still far out of their financial reach.
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Home prices there are so expensive that many young adults who move there for jobs wind up sharing apartments with roommates.
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Nationally, homes sell for an average of three times a buyer’s yearly salary. But in these cities, where millennials make up between 46% and 52% of new residents, the price of a new home exceeds the typical annual income by 3.5 to 7.1 times.
Dive Insight:
Young adults already are delaying homeownership, partly because their cohort suffers from higher-than-average unemployment and earns lower wages—and therefore struggles to save enough money for down payments. And Zillow Chief Economist Stan Humphries predicts that when mortgage rates rise above 4%—as they’re expected to in 2015—young would-be buyers will face an even greater challenge to homeownership.