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Study finds the best and worst states for millennials to buy a home.

Byline: Staff Report

43 percent of adults ages 25 to 34 said in a recent GOBankingRates survey that they're prioritizing saving for a home despite dealing with a number of financial woes like staggering student loan debt or minimal wage growth. In order to help today's generation find affordable housing, GOBankingRates evaluated all 50 states to find the most and least affordable destinations for aspiring millennial homeowners.

The study calculated how long it would take millennials to save for a down payment in each state and what their monthly mortgage would be. The mortgage payment amount and time to save for a down payment were scored to develop the final state affordability ranking. The study found that West Virginia is the best for millennials. Homes have the lowest median list price at $159,000 and monthly mortgage payments in West Virginia are also the lowest on the list.

Top 5 U.S. States for Millennials to Buy a Home

West Virginia

Median list price: $159,000Median millennial earnings: $50,130Monthly mortgage payment: $847Estimated time for millennials to save for a down payment: 3.2 years

Iowa

Median list price: $179,000Median millennial earnings: $62,191Monthly mortgage payment: $995Estimated time for millennials to save for a down payment: 2.9 years

Ohio

Median list price: $169,900Median millennial earnings: $55,894Monthly mortgage payment: $948Estimated time for millennials to save for a down payment: 3 years

Missouri

Median list price: $180,000Median millennial earnings: $55,312Monthly mortgage payment: $1,000Estimated time for millennial to save for a down payment: 3.3 years

Indiana

Median list price: $180,000Median millennial earnings: $54,948Monthly mortgage payment: $1,000Estimated time for millennials to save for a down payment: 3.3 years

To find the most affordable states for millennials, GOBankingRates started with the national median income for millennials ages 25 to 34, which is $60,932. Assuming millennials put away 20 percent of their salary each month to save for a down payment on a home, GOBankingRates determined the amount of time it would take to afford a 20 percent down payment and calculated the estimated monthly mortgage payment in every state based on a 30-year, fixed-rate mortgage.

Additional Insights

West Virginia is the only Southern state among the top five for millennials; the other four states are located in the Midwest. Although Iowa is the No. 2 most affordable state for millennial homeowners, it takes the shortest amount of time for millennials to save for a down payment in this state at 2.9 years. Hawaii is the least affordable state for millennials with a median list price at $615,000 and a monthly mortgage payment of $3,256. Millennials earn $6,076.25 per month, which means their mortgage payments take more than half of their earnings. The other four least affordable states for millennial homeowners are California, Massachusetts, Oregon and Washington.

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Publication:The Mecklenburg Times (Charlotte, NC)
Date:Oct 23, 2018
Words:487
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