Some Millennials Won’t Be Able to Buy Homes Even With Savings and Parental Help

Let’s say you’re a Millennial who has your finances pretty much in order. You’ve got over $10,000 saved, you’re adding to that savings account every month, and you’re thinking about buying a home in five years. Your parents have even said they’ll help you make that down payment, so you should be good to go, right?

Not if you live in a city like San Francisco—or Boston, or Denver, or Portland, or a lot of other metropolitan areas. According to Bloomberg and new research from Apartment List, Millennials are going to have a hard time affording down payments in today’s real estate market:

Surveyed millennials [in San Francisco] reported current savings at $14,469, monthly savings of $360 and help from outside sources of $8,264, on average. At that pace, it’ll take them nearly 28 years to save enough money for a down payment, even though 37 percent of millennials said they’re planning to buy between three and five years from now. That doesn’t factor in the possibility of an aspiring home owner saving more money, perhaps thanks to a pay rise, but you get the picture.

Bloomberg includes a chart comparing Millennial savings to average down payment costs. Those San Francisco Millennials with the $14K in savings will need $142,000 to make a down payment—more than ten times what they currently have saved. Portland Millennials only need around $45K for a down payment, but the surveyed Portlanders had less than $5,000 in savings, on average.

What’s a Millennial to do? Bloomberg suggests seeking “alternative financing solutions” such as Federal Housing Administration loans. Bloomberg also suggests relocating:

The cities where affordability is a lesser concern include East Coast mainstays such as Atlanta and smaller urban areas like Charlotte, North Carolina, and San Antonio. Millennials in these cities are also much more prepared for home ownership. Apartment List estimates that young first-time buyers in Atlanta are just 3.2 years away from having enough money for a down payment.

Three years should be long enough for you to re-establish yourself in a professional environment, re-build a social circle, and begin to put down roots in a new community, right? So start thinking now about which affordable city you might want to make your future home’s home—because if you want to settle down, you may have to get moving.

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