West Virginia is the best place for millennial homebuyers looking to catch a break from soaring home prices and hefty down payments, according to a new study by GOBankingRates.
The personal finance website calculated the list based on the median millennial income of $60,932 and a 20 percent monthly savings rate. From there, the site determined the amount of time it would take to save a 20 percent down payment, as well as the estimated monthly mortgage payment based on a 30-year fixed-rate mortgage.
(PRNewsfoto/GOBankingRates)
West Virginia, Ohio, Arkansas, Indiana and Iowa were the most affordable states for millennials with median home list prices ranging from $150,000 to 169,000 and monthly mortgage payments no more than $766. It only takes buyers in these states less than three years to save a 20 percent down payment.
On the other hand, Hawaii, California, Massachusetts, Colorado and Oregon were the least affordable states thanks to median home list prices ranging up to a whopping $599,000 and monthly mortgage payments that are at least $1,551.
In the most expensive state, Hawaii, it takes millennials 9.8 years to save a 20 percent down payment — 7.3 years more than the least expensive state, West Virginia.
Although it seems like a “no-brainer” for millennials to start moving to states like West Virginia, Ohio and Arkansas, GOBankingRates says 25- to 34-year-olds still favor more expensive markets such as San Francisco, Portland, Ore., Seattle and Denver; those metros are known for robust jobs markets centered around technology, healthy income growth rates and access to vibrant cultural scenes.
See where your state ranks here.