Millennial home buyers have made good inroads to home ownership in recent years, but rising home prices and debt burdens are posing a challenge. This situation affects Chicago home buyers as well as young adults around the country. Here’s how the numbers stack up, according to Chicago Business First!
Abodo, an apartment-listing company, recently complied a study of millennial home buying activity in real estate markets around the country. While ranking cities, they also considered the ratio of Millennial homeowners vs. renters. Unsurprisingly, the study found that home buying was much tougher in popular urban areas of the East Coat and West Coast, where rising home prices have been outpacing wages for several years.
Here in Chicago, home buying isn’t as difficult as it is in San Francisco, Los Angeles, Boston or New York. But the Windy City is a bit tougher for Millennials than it is in other areas of the Midwest. According to Abodo, about 31.9% of Chicago Millennials own their own homes, while another 68.1% rent their residence. In comparison, Des Moines has a Millennial home ownership rate of 43.6%, and the Twin Cities area stands at 42.4%.
Yet Chicago isn’t too far out of the ballpark. Nationally, about 32.1% of Millennials own their homes, putting Chicago’s 31.9% ownership ratio close to the average. Based on local wage trends and home prices, Abodo estimates that Chicago’s Millennial home buyers need to save money for about 12.8 years to have 20% down for a home purchase. Nationally, it’s estimated that Millennials would need to save money for 15.6 years to save 20% down, based on an average home price of $278,337.
Of course, one should keep in mind that isn’t necessary to have 20% down to buy a home; you can obtain a mortgage with as little as 3% down, if you’re willing to pay for mortgage insurance. And while student loan debt, slow wage growth and rising home prices are legitimate concerns for Millennial home buyers, they’re also worries for Millennial renters! The main takeaway from this study is that home ownership is going to take time and effort, no matter where you are. How much time, and how much effort, depends on your personal circumstances and your local real estate market.
Giving yourself the advantage of a home buyer education will help you succeed! StartingPoint Realty is here to help!
StartingPoint Realty – dedicated to first-time Chicago home buyers!
StartingPoint Realty proudly serves first-time home buyers throughout Chicago and the Northwest suburbs. We provide complete education and guidance during the entire home buying process! Attend a free home buying seminar to begin your path to home ownership!
We also provide many other resources to help you become a successful home buyer! Need down payment assistance? Check out our list of home buyer assistance programs on our website! Visit our Chicago Resource Center for no-pressure information and assistance.
Always feel welcome to contact us for help with your Chicago home buying questions!
Ryan Gable Broker/CEO Starting Point Realty
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