American Dream to own a home is dead for many Millennials

Millennials who want to purchase a house are locked out of coastal markets, and that’s a harmful long-term trend for economic growth.

In cities such as Los Angeles, rental rates have crept to “apocalyptic levels,” but the median house price is so high that millennials can hardly afford a down payment, Kerri Zane writes for Forbes. Millennials have started to earn higher salaries and their job experience has made them more marketable, but tuition and housing prices haven’t slowed. In large coastal cities, the economy might be strong and offer high wages, but the high cost of living makes it difficult for young Americans to gain a foothold and save enough for a down payment.

That has millennials looking away from Los Angeles, San Francisco, and New York City. For the American dream, millennials have moved inland.

In cities such as Des Moines, Iowa; Provo, Utah; and Pittsburgh, Pennsylvania, millennials control the housing market for home buyers. Those smaller, but robust, cities offer sizable populations, lower costs of living, and job opportunities. Their money buys more square footage, too. Buying a house in Houston is 50 percent cheaper than renting one, and a median home price of $162,784, millennials save money and can have a house large enough to start a family comfortably. In New York City, buying is marginally cheaper than renting, but the median home price is about $438,000, and the house will be much smaller than in Houston, The Atlantic noted.

For those more affordable cities, the current situation is great. They get an influx of young workers lured by good jobs and a low cost of living. They start families and anchor themselves economically and socially in the area. They advertise in expensive cities and brag about how much further a salary goes in their locale.