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Showing Original Post only (View all)it will take 29 years for college grads to save 20% down on SF home, study shows [View all]
According to a new Trulia study, it will take the average Bay Area college grad approximately 29 years to save 20% down for a typically priced home. For those prospective buyers with no degree, forget it. By this studys calculations, that 20% down savings is impossible for millennials who didnt earn a college degree. The gallery above gives a picture of what the San Francisco market looks like now. In the future, its going to be even worse, from the buyers perspective.
Method
Trulia says, Our study calculates how many years it will take a millennial (young adult aged 25-30) to save a 20% down payment in the 100 largest U.S. metros assuming that home prices and incomes will increase over time with and without a college degree. Of course, the whole study projects into the future. By the time these grads begin looking for homes, prices will be higher still than they are today. To estimate how much the required down payment will grow over time, Trulia uses the 20-year Federal Housing Finance Agency (FHFA) home price growth rate for each of the 100 largest U.S. metros based on current median prices.
This information is then correlated with potential household income grow
http://blog.sfgate.com/ontheblock/2015/07/09/college-grads-must-wait-29-years-to-earn-20-sf-metro-homes-for-those-without-education-its-never/