News Week

Millennials Homeownership Is Soaring in California

After waiting years for the right time to buy, millennials are now getting on the property ladder in droves, especially in California’s Bay Area.

In San Francisco, 37.8 percent of new mortgages issued last year went to older millennials aged between 35 and 44, according to Redfin analysis of Home Mortgage Disclosure Act (HMDA) data covering purchases of primary homes. It’s the biggest share of mortgages taken by older millennials in 2023 out of all the 50 most populous metropolitan areas analyzed by the real estate platform.

The other California cities where the share of new mortgages issued to homebuyers aged 35 to 44 was above the 37 percent mark were Oakland, with 37.2 percent, and San Jose, 37.1 percent, Anaheim with 33.2 percent; Los Angeles with 34.5 percent; Riverside with 28.8 percent; Sacramento with 30.9 percent; and San Diego with 31.8 percent.

San Francisco was the city with the highest shares of new mortgages going to older millennials last year, according to a Redfin report. PHOTO-ILLUSTRATION BY NEWSWEEK

This is hardly a record that older millennials might be willing to celebrate.

According to Redfin, the reason why so many older millennials are taking out mortgages and buying their first homes in California’s Bay Area compared to other areas of the country “is because it’s ultra expensive, meaning many people buy their first home in their late thirties and early forties.”

Newsweek contacted Redfin for comment by email on Monday morning.

The reason why cities like Cleveland, Ohio (23.4 percent), Detroit, Michigan (23.4 percent), Cincinnati, Ohio (23.7 percent), Phoenix, Arizona (23.8 percent), and Warren, Michigan (23.9 percent), had the smallest shares of older millennials taking out mortgages last year is because they’ve already purchased homes there, as they were relatively more affordable.

Buying a home in the U.S. remains expensive and unaffordable for many, despite a brief price correction between late summer 2022 and spring 2023. In April, the latest data on Redfin’s website, the median sale price of a home in the U.S. was $432,902, up 6.1 percent compared to a year earlier.

Read more: How Much House Can You Afford?

Americans of all generations purchased fewer homes last year than the year before, according to Redfin data, making 2023 the least affordable year on record.

At the national level, two in five new mortgages issued last year went to young people under the age of 35, with 27 percent going to older millennials.

Overall, the number of mortgages taken out by young people—aged under 35—dropped 18 percent in 2023 compared to the previous year. For those aged between 35 and 44, it fell by 22.7 percent; for those aged between 45 and 54, by 21.6 percent; for those aged between 55 and 64, by 20 percent; for those aged between 65 and 75, by 19.6 percent.

Are you a millennial who got a mortgage last year to buy your first home? Contact g.carbonaro@newsweek.com to share your experience.

Source: https://www.newsweek.com/millennials-homeownership-soaring-california-1907418