Why are young people still renting when studies show they could afford home ownership in most of the metro areas in the United States? According to City Lab, it's a question that apparently boils down to two factors: Student debt and availability. Credit scores are being crunched by debt and corporations are buying affordable housing stock in all-cash deals and turning them into rental properties. That's some tough competition. Certainly, there are many other factors for why younger people aren't buying, like wrangling up a down payment, stability of the city or their careers, Hell, their apartment my just be better than anything they could ever afford to buy. All of these are valid reasons. According to the map, 43.4% of renters aged 25-34 can afford to own a home in Philadelphia, with 39.8% home ownership rate in the same age bracket. How does that stack up with other major cities on the East Coast?
Needless to say, it's incredibly difficult to afford a home in the New York Metro Area. The numbers back that up. While the median income is much higher than Philly ($55,000 compared to $40,000), home ownership rates are far lower at 23.6%.
Again, median income is much higher than Philly and even New York, but the gap in those who can afford to own and those who actually own is similar to Philly.
The D.C. Metro Area is another tough market for younger home buyers. While they apparently have the money (44% can afford to own and their median income is a whopping $66,000), only 34% own their home.
If you're so inclined, drop us a line in the comments and tell us why you're renting your Philly area pad and not laying down some roots in the City of Brotherly Love.
· Many Renters Could Afford Mortgages, But Can't Afford Homes [City Lab]
· An interactive map from the Harvard Joint Center for Housing Studies [HJCHS]