A typical Millennial will be able to afford to live in the major cities in the United States and there is no question about that. The question actually goes to, how much real estate space will they be able to afford?
A home affordability calculator was used to analyze the median income and net worth of these people, and then compared it to the current down payment and interest rates from the major cities. This real estate calculator will be able to determine the real estate size that a family can afford, and also if they will be able to have a house with a spare bedroom or not.
However, the result was not the answer that many were expecting. Unlike the previous generations, people under 35 years of age will not be able to afford a 1,000 square-foot home in the 23 major cities, based on a recent study by SmartAssest.
The calculator is expected to aid possible buyers to determine the cost that each one can afford. This is extremely helpful to middle-class families who are trying to think over if they can afford to buy a house that features an extra bedroom. But the results can get absurd in many of the largest cities.
The Millennials can afford to live in less than 500 square feet in Los Angeles, Denver, Washington D.C. and Philadelphia. The same amount can give them 165 square feet in New York and 135 square feet in San Francisco, Fortune added.
Chicago, Detroit and Memphis are the cities that offer a more affordable cost of real estate for the Millennials.
About 80 percent of Millennials did voice out that the low interest rates and the low down payments are encouraging them to acquire their new dwelling units. However, factors like the slow increase in income and the tremendous amount of student loan have been keeping them at bay. They are currently lacking income and savings to have even the down payment for their own place covered.
