Although millennials are flocking to San Francisco to take advantage of the city’s tech economy, they’re finding it difficult to purchase a home once they get here.
A new study by RealtyTrac says San Francisco is the least affordable county in the U.S. for millennials hoping to purchase a home. According to the firm’s data, San Francisco saw a 68 percent population increase in millennials between 2007 and 2013. As of April, the average millennial buyer would need to devote 78 percent of his or her median income to afford the median home price of $950,000.
Although homes across the Bay Bridge were considerably more affordable for millennials, Alameda still ranked as the eighth least-affordable U.S. county. Millennials could expect to spend about 45 percent of their income to afford Alameda County’s median price of nearly $520,000.
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| Homes in San Francisco’s Inner Mission neighborhood, now a hotbed of millennials. |
BAY AREA $1 MILLION HOME SALES REACH ALL-TIME HIGH
Sales volumes for $1 million-plus homes have reached their record highs in the Bay Area, according to an article in the San Jose Mercury News.
Citing statistics from DataQuick, the publication says that 5,734 homes sold for more than $1 million in the nine-county Bay Area in the second quarter, surpassing the previous peak of 5,699, set in 2005.
Hillsborough had the most expensive Bay Area home sale in the second quarter, at $12.9 million. The article notes that Silicon Valley’s economic boom has created so much wealth and pushed home prices so high that there are currently no single-family homes on the market in Menlo Park west of Highway 101 priced less than $1 million.
Pacific Union CEO Mark A. McLaughlin gave the Mercury News his take on rising prices in the Bay Area, pointing to the region’s economy, population growth, and desirability as three key drivers.
NATIONAL HOMEOWNERSHIP RATE LOWEST IN ALMOST TWO DECADES
Millennial homebuyers in San Francisco may face bigger challenges here than they do in other parts of the country, but a new study from the National Association of Realtors says that the generation is also notably absent from the national market, leading to the lowest home-ownership rate in nearly 20 years.
According to the study, the national homeownership rate dropped to 64.8 percent in the separate quarter. The number of Americans who own homes peaked at 69 percent in 2004 and has been steadily declining for the last decade.
NAR attributes the decrease at least in part to the absence of first-time homebuyers, noting that student debt and lower-paying jobs have conspired to keep millennials out of the action.
U.S. ECONOMIC GROWTH EXCEEDS EXPECTATIONS IN Q2
The U.S. economy performed better than expected in the second quarter, surely an optimistic sign that a full recovery is in store for the country’s housing market.
The Los Angeles Times reports that the nation’s gross-domestic-product output increased by 4 percent in the second quarter, besting previous predictions of 3.1 percent growth. Doug Handler, chief U.S. economist at IHS Global Insight, told the publication he expects the economy to expand by 3 to 3.5 percent in the second half of 2014.
The article notes that the U.S. economy added more than 230,000 jobs in July, the sixth consecutive month of 200,000-plus employment gains.
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