How hard is it for millennials to break into the homebuying market?
Especially in San Jose.
A new report shows that between 2005 and 2015, the rate of home ownership among millennials in the San Jose metro plunged faster than anywhere else in the country — a 34.8 percent decrease “in the heart of Silicon Valley,” as the report puts it.
The report by the Abodo apartment search website shows that when U.S. metros are ranked for having the most millennial homeowners, San Jose ranks 131st on the list. Only 20.2 percent of millennials in San Jose own homes. That’s even worse than in the San Francisco-Oakland metro, where 20.5 percent of millennials are homeowners.
And ponder this: The average millennial in San Jose would have to sock away 15 percent of his or her annual income for 27.9 years in order to afford a 20 percent down payment on a home. The average value of a millennial-owned home in San Jose is $737,077.
Not surprisingly, most millennials rent in the San Jose metro — 79.8 percent of them.
If you are a millennial, you might not want to read this report, which is filled with depressing reminders — for instance, the fact that millennials grapple with earnings 20 percent lower than those of boomers. At the same time, millennials often are burdened with high student loan debt.
By compiling data from the U.S. Census and crunching numbers from the MLS, Abodo is building on a 2017 report by the Joint Center for Housing Studies at Harvard, showing that 1.4 million recent U.S. homebuyers were under age 35 in 2015. That figure, Abodo notes, “is well below pre-boom levels. The number of homeowners over age 55 jumped by 13 percentage points to 54%, between 2001 and 2015, while the share of homeowners under age 35 shrunk by 5 percentage points over the same period, to about 33%.”
The Harvard report is here.
And Abodo’s full report is right here.
This chart puts San Jose’s precipitous decline of millennial home ownership into context:
Top: Illustration courtesy of Abodo
Tags: affordable housing, Bay area apartments, Bay Area housing prices, millennials, Oakland, san francisco, San Jose, Silicon Valley