Millennials will need to save up for decades if they want to buy in NYC
Few Millennials are able to take advantage of today's sluggish market. Rawpixel/iStock
Millennials are known for their optimism and they'll need it if they plan on buying an apartment or house in New York City. New data estimates few millennials will be able to take advantage of today’s buyers' market. While the overwhelming majority of those surveyed would like to get their feet on the first rung of the housing ladder, far fewer are financially prepared to do so in the near term.
According to statistics from Apartment List, it will take two decades for 63 percent of the city’s prospective millennial buyers to save a 20 percent down payment of about $60,000. And that's a down payment for a median-priced condo in the New York/New Jersey metropolitan area, which is about $300,000. Of course, you'll be hard pressed find anything that affordable in Manhattan and much of Brooklyn. The report also shows many millennials underestimate the amount they will need to save.
While brokers and developers have been keen to attract millennials with efficient apartments and coveted amenities, only fifteen percent of millennials in NYC are expected to save a down payment within the next five years.
New Yorkers aren't alone in their inability to take advantage of the current downturn in house prices. Denver and San Francisco rank highest in terms of the time needed to get enough funds for a down payment. This data is backed up by research from TD Ameritrade that found millennials in the U.S. have ambitious plans for how their lives will play out after college, but are struggling under a collective $1 trillion in student loans, credit card repayments and debt.
Buying is high on the #goals of New York's millennials with 88 percent of renters saying they plan to buy a home at some point in the future although only four percent expect to do so within the next year. 42 percent say they won’t buy for at least five years, suggesting nearly half of the city's millennials have had a reality check on house prices.
Of those millennial renters in NYC who plan to become co-op, condo or townhouse owners, 38 percent have zero down payment savings, while just 19 percent have saved $10,000 or more.
Apartment List analyzed data from 6,400 surveyed millennials. With millennials on the verge of surpassing baby boomers as the nation’s largest generation, the question of when and if they will purchase homes looms large over the housing market.
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