There are many challenges to ponder when buying a new home. Buyers typically consider things like the quality of schools, the cost of ongoing taxes, neighborhood safety and the ability to sell the home later among numerous others.
Millennials face those same issues along with:
- low unemployment
- low wage growth
- high student debt
- increasing housing prices
- possible (soon to be) mortgage rate increases
But millennials are reaching an age where they would like to buy a home. GOBankingRates ranked the 50 states for the "Best and Worst States for First-Time Home Buyers," based on three factors:
- foreclosure rates
- share of the market represented by first-time home buyers
- median list price for a home
Here's what their results looked like:
Top five worst states for first-time home buyers:
- New Jersey
- South Carolina
- North Carolina
Top five best states for first-time home buyers:
- Rhode Island
- West Virginia
- New York
And another additional prediction related to millennial home buyers from Zilow is:
"Millennials will move to the suburbs. It’s no secret that the majority of millennials would rather live in urban centers with access to a plethora of entertainment and shopping options and robust tech-centered job opportunities. But most millennials, especially those without help from parents, can’t afford to live in these areas."
The are predicting that 25- to 34-year-olds will begin moving to the ‘burbs in search of more affordable home prices. For more predictions, check out: Zillow’s 6 predictions for the 2018 housing market
We started with the national median income for people ages 25 to 34, which is $60,932. We assumed each person would be putting away 20 percent of their salary each month to save for a down payment — in other words, as much as possible. We calculated the amount of time it would take to afford a 20 percent down payment based on each state's median listing price as well as the estimated monthly mortgage payment, based on a 30-year, fixed-rate mortgage. We scored each of those two numbers — time to down payment and mortgage payment — to develop our final state affordability ranking. Click through to learn where millennials can expect to find the best prices when it comes to buying a home.