In a housing market pitted against the youngest generation, Houston remains affordable for Millennials.
Although skyrocketing housing costs and limited space have kept Millennials from buying housing in popular metropolitan areas, Huston housing is still in the range of affordability for the average millennial.
Bloomberg L.P., a financial software and data company, compared the median home value of the top 50 metropolitan areas to the median Millennial income to calculate how much more Millennials would have to make each year to afford to live in each city. Ranked 36 out of the 50 most expensive cities for Millennials to live in, Atlanta is one of the more affordable cities. In fact, with a median home value of $159,450 and a median annual Millennial earning of $35,034, Millennials in Huston are actually expected to have an average surplus of $13, 401.
Millennial Affordability – a Nationwide Problem
While Millennials haven’t been priced out of every metropolitan area, many of the cities where they have been priced out are the spots with the best job markets for Millennials. San Jose, one of the best cities for STEM graduates, is $80,162 outside of the budget for the average Millennial. The biggest gap between home values and Millennial earnings is along the West Coast. In the top three California cities (San Francisco, San Jose and Los Angeles), the average Millennial isn’t making even half of what they need to afford a house.
Affordability has worsened considerably in just the last four years. In the National Association of Realtors’ 2011 Housing Affordability Index, New York City was just outside the scale of affordability, but, as the Bloomberg study shows, the 2015 Millennial yearly paycheck is $6,550 away from affording a house in the city.
So what makes Huston more affordable than New York or Boston (two major cities that have both priced out Millennials)? For starters, Huston has huge amounts of land space that most major cities don’t, so housing space isn’t limited. Add low cost of living and high wages (Houston was ranked eighth highest annual wages in America in 2011), and Houston might become the next big Millennial hub.