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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. 

About Author: Mike Albanese

A graduate of the University of Alabama, Mike Albanese has worked for news publications since 2011 in Texas and Colorado. He has built a portfolio of more than 1,000 articles, covering city government, police and crime, business, sports, and is experienced in crafting engaging features and enterprise pieces. He spent time as the sports editor for the "Pilot Point Post-Signal," and has covered the DFW Metroplex for several years. He has also assisted with sports coverage and editing duties with the "Dallas Morning News" and "Denton Record-Chronicle" over the past several years.

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