A new survey shows millennials locally and nationally struggling to buy.
Rental data website Apartment List recently surveyed 6,400 millennial renters on plans for buying a home. Most responded they’d like to buy, but money is an issue, and a growing one as prices continue to climb along with student debt.
Locally, the researchers estimated that “74 percent of prospective millennial homebuyers in Seattle will need more than two decades to save a 20 percent down payment on the median priced condo in their area, while just 14 percent can save a down payment within the next five years.”
That figure jumps to 82.3 percent in San Francisco.
“The situation is dire even in more affordable locations,” the report said. “In each of the metros we analyzed, we estimate that fewer than half of millennials will have a 20 percent down payment saved before 2038.”
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Representatives for Apartment List told The News Tribune the survey included 25 respondents from Pierce County. While too small for significant analysis, the results broke down as follows:
▪ 84 percent of those Pierce County millennial renters said they plan to buy a home some time in the future. (It was 90 percent for Seattle respondents.)
▪ 4 percent expect to do so within the next year; 32 percent said they won’t buy for at least five years.
▪ Of millennial renters who plan to buy a home, 45 percent have saved nothing for a down payment, while 10 percent have saved $10,000 or more. (19 percent of Seattle respondents had saved $10,000 or more.)
Student debt load is another critical factor.
The report notes: “We estimate that 23 percent of college graduates without student debt can save enough for a down payment within the next five years, compared with just 12 percent of college graduates who are currently paying off student loans.”
Skipping college didn’t help.
“Those without a college education fare worst, with just 6 percent able to save a down payment within five years.”
“Cannot afford to buy” and “down payment” were the top barriers listed in the report, nearly double in amount over “not ready to settle down” and “bad credit.”
The city of Tacoma has committed to a $70 million strategy over 10 years to address its affordable housing crisis.
“Nearly half of the city’s population is under the age of 34 years old, and the median age is 36 years old,” the city said at the time. Millennials represent 1 in 4 residents in the city, with residences split 50-50 between renters and homeowners.
A Northwest Multiple Listing Service home sales report, released Thursday, predicted that area prices will continue moving upward, particularly given the gap between King County’s median home price of $643,913 and Pierce County’s $344,950.
Some local developments are introducing alternatives, such as work/live apartments with storefront space.
Another development, called The Preserve, offers lower-priced homes with homeowner association lease-holds to keep the terms affordable and avoid flipping or rental conversions.
In the first few days of announcing the new development near Blueberry Park, nearly 400 applications were received.