The skyrocketing price of rent in some of the nation’s most expensive metro areas is not keeping aspiring Millennials away. Just in case you are unaware of exactly who the Millennials are, they are individuals who were born between 1980 and 1995. They are also referred to as Generation Y and are comprised of today’s 20- to 35-years olds.
The National Association of Realtor’s online publication, RealtorMag, recently reported on a study from the data-driven benefits and compensation firm, PayScale. It revealed that in spite of hefty price tags for monthly rent, many of the pricier metro areas are viewed by Millennials as more rewarding places to live, work and play.
PayScale analysts surveyed the results gathered from 650,000 surveys, which were taken by Millennial-age participants within the last two years. Factors addressed included elements of employment such as commute times, compensation, overall job satisfaction, stress in the workplace and the perception of growth opportunities with current employers. The survey also queried respondents about job perks that are typically the most popular among younger employees such as: more casual dress codes, pets at the office, more creative or relaxed working environments, free food, onsite gyms, telecommuting options and additional educational opportunities provided by the company.
What about affordable housing?
One hugely important component that the study did not take into consideration was the availability of affordable housing. It is not surprising that most of the hottest metro areas that younger members of the U.S. workforce gravitate to are also the most expensive. This often leaves Millennials between that proverbial rock and a hard place when it comes to finding a reasonably priced place to live.
According to the information gathered from PayScale, younger workers are flocking to these 10 metro areas:
- Seattle-Bellevue-Everett, WA
- San Francisco-San Mateo-Redwood City, CA
- San Jose-Sunnyvale-Santa Clara, CA
- Austin-Round Rock, TX
- Provo-Orem, UT
- Cambridge-Newton-Framingham, MA
- San Diego-Carlsbad-San Marcos, CA
- Madison, WI
- Salt Lake City, UT
Median Base Salaries
Surprise! When the average salary is calculated, based on the median base salary among younger employees, the annual income is $54,850. Please consider that on top of the cost of housing, most Millennials are also faced with student loans and car payments, not to mention the fact that most of the preferred cities also have a higher cost of living than the national average!
For the sake of comparison, here’s a look at 5 of these cities, the cost of living comparison and median home price for each, taken from the website, Sperling’s Best Places:
- cost of living is 54.3 percent higher than the national average and the median home price is $429,400.
- cost of living is 142.60 percent higher than the national average and the median home price is $875,100.
Salt Lake City
- the cost of living is 15.00 percent higher than the national average the median home price is $263,100.
- the cost of living is 6.50 percent higher than the national average and the median home price is $229,700.
- the cost of living is 83.40 percent higher than the national average and the median home price is $524,800.
The good news is that, according to a report from TransUnion (a global provider of credit information and management services for around 45,000 businesses and 500 million consumers), mortgage borrowers under the age of 30 have the lowest delinquency rate of all borrowers. To keep this information in perspective, TransUnion’s analysts also noted that at 4.16 percent, this group makes up the smallest share of all mortgage accounts. However, in light of what Gen Y has witnessed firsthand with the housing and economic downturn, it stands to reason that they would proceed with caution before committing to the responsibility of a mortgage.
TransUnion’s head of financial services, Steve Chaouki reflected, “It is encouraging to see younger borrowers perform well, since their generation was significantly impacted by the recession and their loans are among the newest.”
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