People stop to look at San Francisco's famed Painted Ladies victorian houses on Feb. 18, 2014 in San Francisco, California.
Photograp by Justin Sullivan—Getty Images
By Jonathan Chew
April 20, 2016

Millennials and home ownership go together like Taylor Swift and Kanye West do nowadays. But a new report shows just how hard it could be for young Americans to buy a fancy pad.

In a survey of around 30,000 renters by online rental marketplace Apartment List, around 79% of millennial renters dreamed about purchasing a home, but admitted that affordability remains a huge obstacle for them. That’s not surprising, since home ownership rates are perennially low among those under 35-years-old.

But how big of a challenge is it? Using data on starter home prices and the average saving rates for millennials currently, Apartment List found that renters in 12 major metropolitan areas would need a decade or more before they could afford even a 20% downpayment on a home.

That number is greatest in San Francisco, where homes are notoriously expensive. Most millennials would need to save for almost 28 years before they could afford a starter home’s downpayment, which could come out to around $142,800 in the Bay Area.

 

The West Coast, overall, is especially problematic for millennials, with Californian cities taking the top four worst spots to pay for a home in this survey.

The length of time needed for a home could also be a reason why younger Americans aren’t especially interested in saving for one. In Apartment List’s survey, 37% of millennial renters have not saved a single cent for a down payment, and more than 41% have not set aside a portion of their monthly income for a future home.

 

Last July, researchers at the St. Louis Federal Reserve recommended young adults postpone home ownership for years, if not decades. They asked millennials to “delay purchase of a home with its attendant debt burden until it was possible to buy a house that did not make the family’s balance sheet dangerously undiversified and highly leveraged.”

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