There have been a handful of reports over the past year detailing why millennials are no longer buying homes. In addition to a preference for city living, most Americans under the age of 35 say they don’t have enough money saved for a down payment, which is about 20 percent of the home sales prices.
The good news is that there are a few states that make the dream of homeownership possible. According to a new report from GoBankingRates, West Virginia is the best state for millennials wanting to buy a home. Using the median millennial income of $60,932, the personal finance site calculates that young buyers should be able to afford a $150,00 home (the median list price) with a $693 monthly mortgage payment. GoBankingRates predicts that millennials could come up the 20 percent down payment within 2.5 years.
Millennials living in Ohio also have a good shot at buying a home. The study predicts that buyers should be able to snag a $154,900 house with a $704 monthly mortgage payment after saving for 2.5 years.
Rounding out the top three affordable states is Arkansas, where millennials will need to save for about 2.7 years in order to pay the 20 percent down payment. After that, the median list price for a home is $164,900 with a monthly mortgage payment of $757.
The worst places for millennial homeownership
As is the case with millennials, what they want is different than what they can afford.
Colorado and California are both popular states for people under 35, featuring robust music scenes, good food and legalized recreational marijuana use. At the same time, they are two of the worst places to buy a home.
In Colorado, the median list price is $408,068, with a monthly mortgage payment of $1,780. In order to buy a home, the average millennial earning $60,932 will have to save money for 6.7 years in order to afford the down payment.
Over in California (the second worst state to buy a home) the median list price for a home is $499,950, with a monthly mortgage payment of $2,168. With prices like this, it will take the average millennial 9.8 years to save for the down payment.Still neither city holds a candle to Hawaii, the worst state for millennials to buy a home. Believe it or not, the median list price for a home is $599,000, making the monthly mortgage payment a whopping $2,584. It will take most young buyers nearly a decade, 9.8 years, to save for the down payment.
Tougher financial obstacles mean that more millennials are renting longer in urban environments. Still, there is hope that those under the age of 35 will get their shot at the American dream. According to Ellie Mae, a software company, nearly 42 percent of first-time homebuyers are millennials, the largest group of any generation.
Brittany Jones-Cooper is a reporter at Yahoo Finance.
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