Young people are still having a hard time unlocking doors in the Phoenix housing market.
According to recent data released by Zillow, Phoenix-area millennials can only afford about 56 percent of housing listings in the Valley, compared to the national average of 70 percent of homes on the market that are affordable to young adults.
Using U.S. Census data, the online real estate database determined the median income of young adults between the ages of 23 and 34 in various cities, and compared home prices with the estimated 30 percent of monthly income young buyers would have to spend on mortgage payments.
Bloomberg’s Millennial Housing Affordability Index broke it down even further, showing the median home value in Phoenix at $213,250 and median millennial earnings at $35,790.
According to the Bloomberg index, the minimum salary required to purchase a home in Phoenix is $28,547.
That gives the average Phoenix millennial a relatively modest head start on the road to home ownership compared to the sizable gap differentials between median home values and median millennial earnings in cities such as San Francisco, Los Angeles, and New York, where housing prices are through the roof.
Coupled with the low inventory of affordable homes, millennials, overall, are simply not earning wages high enough to bring them up to buying levels. And there is also that burden of trying to pay down student loans after graduation.
It may be a slow pace toward home ownership for millennials, but many are still trying to make it happen.
Michael Orr, director of the Real Estate Center at Arizona State University, told KTAR’s That Real Estate Show that, while there are still a great number of millennials renting out there, sellers have reported seeing more millennials in the marketplace this year over last.
However, he did add, “This isn’t going to be something that just switches overnight.”
You can hear Michael Orr weekly with Realtor and radio host Diane Brennan on That Real Estate Show. The show airs Sundays at 8 a.m. on KTAR News 92.3 FM.