There is a glaring disconnect between where millennial home buyers will find the most affordable homes and where they are actually moving, according to a new analysis out Tuesday from the personal finance website GoBankingRates.
Colorado and Oregon are two of the least affordable states for millennials to buy a home, but that’s where they are headed, the study (Where Millennials Can and Can’t Actually Afford to Buy Homes) found.
GOBankingRates considered the median list prices for homes across all 50 states. Based on the median millennial income of $60,932 and a 20 percent monthly savings rate, GOBankingRates calculated the amount of time it would take a millennial to afford a 20% down payment, as well as the estimated monthly mortgage payment.
Best States for Millennials to Buy a Home
1. West Virginia
- Median list price: $150,000
- Estimated time to save for a down payment: 2.5 years
- Monthly mortgage payment: $693
2. Ohio
- Median list price: $154,900
- Estimated time to save for a down payment: 2.5 years
- Monthly mortgage payment: $704
3. Arkansas
- Median list price: $164,900
- Estimated time to save for a down payment: 2.7 years
- Monthly mortgage payment: $757
4. Indiana
- Median list price: $167,000
- Estimated time to save for a down payment: 2.7 years
- Monthly mortgage payment: $757
5. Iowa
- Median list price: $169,000
- Estimated time to save for a down payment: 2.8 years
- Monthly mortgage payment: $766
Worst States for Millennials to Buy a Home
1. Hawaii
- Median list price: $599,000
- Estimated time to save for a down payment: 9.8 years
- Monthly mortgage payment: $2,584
2. California
- Median list price: $499,950
- Estimated time to save for a down payment: 8.2 years
- Monthly mortgage payment: $2,168
3. Massachusetts
- Median list price: $419,900
- Estimated time to save for a down payment: 6.9 years
- Monthly mortgage payment: $1,833
4. Colorado
- Median list price: $408,068
- Estimated time to save for a down payment: 6.7 years
- Monthly mortgage payment: $1,780
5. Oregon
- Median list price: $352,000
- Estimated time to save for a down payment: 5.8 years
- Monthly mortgage payment: $1,551
Additional Study Insights
- According to the U.S. Census Bureau, Texas, Washington and Colorado are the top three states where millennials are moving, though none top the list of places to buy.
- The three cities losing the most millennials are New York, San Diego and Miami.
- The Bay Area continues to be a hot spot for millennials, with San Francisco and Oakland both in the top 10 cities millennials are moving, despite the high cost of housing.
