The Millennial age demographic has been a troubling enigma to the real estate establishment since the term's inception. With 31.5% of people aged 18 to 34 still living with their parents in 2015, those who managed to escape the nest overwhelmingly tended to rent rather than own. It is understood that home ownership (and car ownership and marriage for that matter) is not on a typical Millennial's immediate to-do list, often leaving the older generation scratching their collective heads. But what exactly could the average 18 to 34-year-old afford to buy if he or she had the sudden urge to own a home? According to a recent study, Chicago fared comparatively well in relation to other major cities in the US.
The study, conducted by SmartAssets and covered by Chicago Agent Magazine, took the median net worth and income of workers below the age of 35 to calculate a down payment that a typical Millennial could afford on a home and found the correlating square footage. According to their data, an average Chicago Millennial should be able to buy a 937-square-foot home for $148,000. Considering the average home size in New York is a minuscule 165 square feet and costs $111,000 and the average Los Angeles dwelling is 297 square feet for $68,500, Chicago Millennials would find themselves living considerably larger due to the greater purchasing power they would wield in Chicago's housing market.
Of course "living large" in a 937 square-foot space is a relative term. To put that number into context, in 2014 the national average for new single family homes was 2,453 square feet. Still, with workers aged 22 to 34 spending on average over 30% of their median incomes towards rent, is it possible Chicago will see more Millennials buck the rental trend and trade in their leases for mortgages in the years to come?
·How Large Can Chicago Millennials Live in 2016? [Chicago Agent Magazine]
·Market Reports archives [Curbed Chicago]
·The Rent is Too Damn High archives [Curbed Chicago]