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Report: 68 Percent of Homes in the DC Area Affordable to Millennials

by Lark Turner

Report: 68 Percent of Homes in the DC Area Affordable to Millennials: Figure 1
Click to enlarge.

68 percent of homes in the DC area are affordable to the average millennial, according to a Zillow analysis published late Tuesday.

That figure is is in line with the national number, where 70 percent of homes are considered affordable to millennials. The Zillow analysis used data from the DC metro area, which draws from a large swath of the region. If the analysis zeroed in on DC proper, the share of homes that millennials could afford would undoubtedly be lower.

Zillow used the median income of millennials aged 23-34 and presumed they could spend no more than 30 percent of their annual income on a mortgage payment.

The DC area’s affordability varies from season to season; in the fourth quarter affordability spikes, while it typically falls mid-year. Affordability in the region has been on the rise over the last year. In the third quarter of 2013, affordability was at its lowest level in Zillow’s five-year analysis, at 55 percent. It stayed low through the third quarter of 2013, when it rose to 58 percent. But in the last quarter of 2014 it jumped 10 percentage points to 68 percent.

The metro area with the lowest affordability to millennials was Honolulu, where just 25 percent of the housing inventory was deemed affordable. In Akron, Ohio, 90 percent of millennials can afford to buy.

See other articles related to: zillow, affordability

This article originally published at https://dc.urbanturf.com/articles/blog/zillow_68_percent_of_homes_in_the_dc_area_affordable_to_millennials/9824

5 Comments

  1. NoVA Mama said at 4:26 pm on Wednesday April 29, 2015:
    I find this pretty unbelievable if you factor in needing 20% down and this group paying rents as high as they do currently prior to purchase.
  1. DistrictDweller said at 5:29 pm on Wednesday April 29, 2015:
    There are so many problems with this analysis, it seems like just another desperate attempt from the real estate industry to prop up business by encouraging young people to get in over their heads. Not only does it ignore a down payment, but using a percentage of income is ridiculous when you consider average student loan debt and the difference between what the "average millennial" (however defined) earns and what he or she keeps. It's time to reconsider how these equations get calculated and what "affordable" means. I am not opposed to property ownership or investing in real estate (in fact, I've been looking at buying in the district for years), but the ridiculous messages coming out of this field lately make it so hard to know who to trust--it's a business that succeeds when people sign ever-increasing amounts of their income and lives away. No thanks!
  1. NewbieWaDoobie said at 7:42 pm on Wednesday April 29, 2015:
    I second all the above, well said. Car payment, student loans, rent, utilities, groceries, insurance, etc. leaves most us scraping by. A home for a vast majority of us is about as likely as opening your paycheck and seeing your purchasing power has increased by 30%-40%...and that's just to get us to par with past prosperous decades. I'm sorry but I don't see the "Most Selfish Generation" (the baby boomers) making that happen anytime soon for the typical salaried employee under 40. They won't be turning loose of their "earned" $$$.
  1. pacerguy00 said at 4:58 pm on Thursday April 30, 2015:
    I couldn't agree more with the above comments. My wife and I (both millennials) just bought our first home in Jan '15. If it wasn't for both of us living with our parents after graduation, while paying off our student loans (a combined 100k), and living with roommates for the last 5 years, we wouldn't have been able to save the ~25k needed for a 5% down payment on our modest NE 3br home. I literally see drug deals completed across the street from my home and I paid 400k for it after a bidding war. So unless zillow thinks millennials can afford a crack house (which mine was before EXTENSIVE renovations), then I have some questions about their math. I must be in the minority of DC millennials who realize that pouring rent down the drain instead of paying a mortgage is more important than proximity to starbucks and the mad hatter. Living near "street pharmacists" isn't ideal, but my neighbors and I are afraid to report them for fear of retaliation. Gentrification and the police presence that precedes are a few years away from making my modest investment pay-off big, i.e.: Trinidad, Bloomingdale, H Street, etc.
  1. yogeshu said at 12:37 am on Sunday May 3, 2015:
    With rapidly rising price of condos in DC area, it is not possible for millennial earning $100k to buy property. A one bedroom condo costs $400-500K and two bedroom $700-800k in crime-free area. The buying is only possible with parents help (in most cases) since millennial lack money for 20% down payment and good credit.

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