Study Finds Best and Worst States for Millennials to Buy a Home
Los Angeles -- 43% 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. To find the most affordable states for millennials, GOBankingRates started with the national median income for millennials ages 25 to 34 ($60,932). Assuming millennials put away 20% 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% down payment and calculated the estimated monthly mortgage payment in every state based on a 30-year, fixed-rate mortgage.
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. West Virginia is followed by Iowa, Ohio, Missouri, and Indiana.
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, on average, 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.
For more information, visit www.gobankingrates.com.