Where the Cards Are Stacked Against Millennial Homebuyers

The cards are stacked against millennial homebuyers—and the deck is high in the country’s most coveted markets.

A new report by Bankrate.com identifies the states where affordability, credit accessibility, employment, the homeownership rate and supply pose challenges to millennial buyers. The report, drawing data from sources including CoreLogic, the National Association of REALTORS® and the U.S. Census Bureau, ranks the following states “tough” for millennial buyers:

1. California
2. Hawaii
3. New York
4. Louisiana
5. Mississippi
6. Rhode Island
7. Texas
8. Colorado
9. Oregon
10. Massachusetts

“Tight market conditions and unaffordably high prices really plague what many young Americans feel are the most desirable places to put down roots,” says Claes Bell, an analyst for Bankrate.com.

Two major factors are at play in California: all-but-absent affordable stock, and a low homeownership rate for millennials, both of which the state is No. 49, according to the report. Markets in sought-after states in the top 10—Colorado, Oregon and Texas—are hard to break into for similar reasons.

There are “easy” markets for millennial buyers, however: Iowa ranks at the top in the report, No. 2 for its millennial homeownership rate and No. 10 for its millennial employment. Utah, Minnesota, Kansas, Missouri, North Dakota, South Dakota, Wyoming, Vermont and Nebraska round out the top 10.

The best and worst states for first-time buyers, based on each indicator assessed in the report:

Affordability

Best

1. Iowa
2. Ohio
3. West Virginia

Worst

1. Hawaii
2. California
3. Oregon

Credit Accessibility

Best

1. Alaska
2. Minnesota
3. Nebraska
   

Worst

1. West Virginia
2. Mississippi
3. Louisiana

Millennial Employment

Best

1. North Dakota
2. South Dakota
3. Utah

Worst

1. Alabama
2. West Virginia
3. New Mexico

Millennial Homeownership Rate

Best

1. Minnesota
2. Iowa
3. Utah

Worst

1. Hawaii
2. California
3. New York

Supply

Best

1. Alaska
2. Vermont
3. New Mexico

Worst

1. Colorado
2. California
3. Texas

Source: Bankrate.com

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