WASHINGTON (AP/CBS4) – Home ownership is increasingly out of reach in the hottest job markets, especially areas that are attracting younger workers.
Millennials are streaming into Denver, the San Francisco Bay Area, Silicon Valley, New York City and Washington, D.C., for the ample job opportunities there. Yet home prices in those areas have risen to several multiples of typical income, forcing many young adults to double-up with roommates, continue to rent or to make tremendous financial sacrifices to buy.
The real estate firm Zillow found this trend most pronounced in six of the nation’s top job markets for younger workers.
Nationwide, homes are generally worth three times the annual income. But in job meccas such as San Francisco, homes on average cost 7.1 times the typical income. A similar trend exists in five other metro areas. Homes directly inside these cities – closer to where the actual jobs are – tend to have even higher average prices than those tracked for the overall metro area.
Zillow’s chief economist, Stan Humphries, notes that first-time buyers have yet to bear the full brunt of this mismatch. When mortgage rates eventually rise from their recent sub-4 percent averages, affordability in these markets will likely become even worse.
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