Miami one of the least affordable cities in the U.S. for Millennials
Creative Commons 1.2: Towpilot, https://commons.wikimedia.org/wiki/File:Miami_aerial_01.jpg
The average Millennial can’t afford to live in Miami, according to the new Bloomberg Millennial Housing Affordability Index.
Bloomberg L.P., a financial software and data company, compared the median home value of the top 50 metropolitan areas to the median Millennial income to calculate how much more Millennials would have to make each year to afford to live in each city. Most metropolitan areas are still in Millennials’ price range, but not Miami. With a median home value of $266,975 and a median Millennial earning of $31,969, the average Millennial would have to make an extra $4,033 a year to afford to live in Miami.
Miami is ranked 11th most expensive out of 50 metropolitan areas. This comes as no surprise, as Miami was also ranked one of the top cities to buy houses priced at over $1 million.
Millennial Affordability – a Nationwide Problem
While Millennials haven’t been priced out of every metropolitan area, many of the cities where they have been priced out are the spots with the best job markets for Millennials. San Jose, one of the best cities for STEM graduates, is $80,162 outside of the budget for the average Millennial. The biggest gap between home values and Millennial earnings is along the West Coast. In the top three California cities (San Francisco, San Jose and Los Angeles), the average Millennial isn’t making even half of what they need to afford a house.
Affordability has worsened considerably in just the last four years. In the National Association of Realtors’ 2011 Housing Affordability Index, New York City was just outside the scale of affordability, but, as the Bloomberg study shows, the 2015 Millennial yearly paycheck is $6,550 away from affording a house in the city.
However, there is still hope for Millennials hoping to live in Miami. As Miami Agent has reported on many times before, Miami-area construction is way up, especially in multifamily construction. In a few years, the abundance of new apartments may lower the average home value enough to bring Millennials back into Miami.