Millennial Renters Have Advantage in Homebuying

A new study by the National Association of Realtors (NAR) revealed 37% of millennial renters can afford to buy the average home compared to 40% of Gen X renters. 

The study states that the income gap between millennials and Gen X renters is declining over the years, but millennials out-compete older generations in some larger markets. 

In the 100 largest metros in the nation, in 30% of those areas, there is a higher share of millennials than Gen X renters who can afford to buy the average home. 

Baton Rouge, Louisiana, was found to have the largest gap between millennials and Gen X renters that can afford to buy homes. The report states 44% of millennials can buy an average home when compared to 34% of Gen X renters. 

El Paso, Texas, had the highest overall share of millennials who can buy a home at 60%. Just 30% of millennials in Boston and New York can afford a home. 

El Pason was also home to the Most Gen Xers who can afford a home at 55%. Twenty-one percent of Gen Xers in Boston and Bridgeport, Connecticut, can afford to buy a home. 

According to the NAR, the income for millennial renters is higher than the income for Gen Xers. Millennial renters earn an average of 20%, or $8,000, more than Gen Xers. The median income in Boston for millennials was $69,530, compared to $53,530 for Gen Xers. 

ATTOM Data Solutions previously reported that the average home prices during Q1 2020 were unaffordable in 66% of U.S. counties. 

This is a drop from Q4 2019, which found earners in 70.4% of U.S. counties found the average home to be unaffordable. This is also a drop from the 69.8% recording in Q1 2019. 

Additionally, owning a median-priced home in Q1 2020—$252,500—takes up 31.1% of the national average wage. This is a slight decline from the prior quarter’s 31.4% reading and Q1 2019’s figure of 31.6%. 

This is also the lowest reading since Q4 2017 when the average worker spent 30.8% to own a home.