The SF-based rental site Apartment List conducted its annual survey of millennial renters this week and found that more young people in both San Francisco and San Jose never plan to buy a home.
Apartment List surveyed 10,000 millennials nationwide, defining said generation as those between the ages of 22 and 38. (Previously the site used a bracket from 18 to 36 for past surveys; per the census, the median age in SF is 38.3 years.)
“In our survey, we ask renters to describe their homeownership goals and the tangible factors influencing their ability to purchase their first home,” says research associate Rob Warnock.
Warnock tells Curbed SF that the sample for the Bay Area was fairly small at 276 people—170 from SF, 77 from San Jose, 17 from Santa Rosa, four from Napa, and eight from Vallejo.
Among the findings: Around 12.5 percent of millennials nationwide say they expect to rent forever. But in San Francisco that figure jumps to 17.1 percent, the fourth highest in the nation. In San Jose that rate climbed higher to 18.2 percent, the highest overall.
Second and third place went to St. Louis and Detroit, respectively. Those two cities have much cheaper housing stock—according to the U.S. Census, the average home in Detroit is valued at $51,600 and in St. Louis at $154,8000. But those two cities also sport much lower annual incomes than San Francisco or San Jose.
Millennials say that the price of buying a home remains the biggest obstacle. Among those who say they will never buy, 69 percent cite cost as at least one of the reasons. Among those who want to buy but haven’t, 70 percent say they can’t afford to buy a home yet.
Across the entire Bay Area, the California Association of Realtors estimated that a single-family home averaged $940,000 in October of this year.
In San Francisco the median price was $1.65 million, and in Santa Clara County that figure came to $1.23 million. The St. Louis Federal Reserve estimates that the national U.S. average in the third quarter of 2019 was less than $311,000.
Calculating based on what survey respondents said about their total savings to date, Apartment List estimates that only 21 percent of San Francisco millennials will able to afford a down payment on a home within the next five years.
It gets worse: That percentage declines to seven percent if buyers want to put down 20 percent instead of 10 percent. But it bounces up a bit to 25 percent if potential buyers’ student loan debt were removed from the equation.