Chart: Most Millennials Have Less Than $1,000 in Savings
Four-digit bank account totals elude 52% of the 18-34 crowd
The Chart of the Week is a weekly Visual Capitalist feature on Fridays.
The majority of millennials are living paycheck to paycheck.
A recent survey of millennials by HowMuch.net found that 51.8% of those aged 18-34 have less than $1,000 held between bank accounts and cash savings.
This echoes previous data we’ve seen – not just on millennials, but Americans in general. For example, we know that 14% of Americans have “negative” wealth. We also know that 62% of Americans don’t have emergency savings that could cover a $1,000 hospital visit or a $500 car repair.
Taking that into consideration, let’s dive deeper into this more recent millennial data.
Younger vs. Older Millennials
The broad survey data can be further divided into “younger” and “older” millennial segments: those aged 18-24, vs. those between 25-34.
Based on the survey question, an intuitive expectation would be that younger millennials are much more likely to have less than $1,000 in savings. After all, many of the people in this group would still be in school, and many are struggling with student debt.
However, the difference is far less than one may expect. While it is true that 57.6% of the younger demographic has less than $1,000 in savings, the older group is not much better off with almost half (47.1%) of them being in the same boat. This shows that many millennials in their late 20s and early 30s are still not able to generate substantial savings.
Male vs. Female Millennials
There is also a significant divide between male and female millennials here, with 56.7% of females having less than $1,000 in savings. Compare this number to the male percentage of 46.5%, and it is clear there is a substantial divide between genders.
Lastly, males are also more likely to have a substantial amount stored away in their bank account. According to the survey, 21.5% of males have more than $20,000 of savings, while only 11.9% females can say the same.
Mapped: What You Need to Earn to Own a Home in 50 American Cities
What does it take to own a home in the U.S. in 2023? Here’s a look at the salary needed for home ownership in the top 50 metro areas.
What You Need to Earn to Own a Home in 50 American Cities
Once a fundamental part of the American dream, the ability to own a home is drifting farther and farther away for many Americans.
Between skyrocketing prices, stagnating wages, and now rising interest rates, the deck seems to be increasingly stacked against home ownership.
Using May 2023 data tabulated by Home Sweet Home, we map out the annual salary needed to afford a 30-year mortgage (at 6.37%) to buy a home in America’s 50 most populous metropolitan areas.
The monthly minimum mortgage payment includes taxes and insurance as well, and is capped at roughly one-third of the income. This analysis also assumes that the homeowner will put down a 20% down payment.
The Least and Most Affordable American Cities to Own a Home
At the top of the list, and at the very west of the country, San Jose is the least affordable city to own a home for the average American.
One would have to earn at least $374,000 a year to afford a $1.6 million dollar home in the city.
To put those numbers into perspective, the median American annual income is $75,000, about one-fifth what’s required to buy a home in San Jose.
Here’s a look at the annual earnings needed to afford a home in all 50 largest cities in the U.S., ranked from least to most affordable.
|Rank||Metro Area||State||Median Home Price||Annual Salary|
|7||New York City||New York||$577,300||$160,233|
|15||Salt Lake City||Utah||$522,700||$122,717|
Other Californian cities, San Francisco (ranked 2nd), San Diego (3rd), and Los Angeles (4th) all require an annual income of at least $180,000 to attempt home ownership within their metropolitan boundaries.
Boston (ranked 6th) and New York (ranked 7th) represent unaffordability on the East Coast, both requiring at least $160,000 a year to buy homes there.
It’s not just the coasts that are expensive however. To buy a home in Denver (ranked 8th) and Salt Lake City (15th) means earning more than $120,000 a year.
However, cities in the Midwest and South, like Pittsburgh, Detroit, Oklahoma City, and Louisville, are far more affordable, requiring less than $63,000 a year to buy a home.
Interest Rates Rock Home Ownership Chances
Aside from the obvious price differences in housing markets, a key factor that has elevated income requirements across the board is the rapid rise in interest rates in the last year. In fact the average 30-year mortgage has pushed past 7%, the highest it’s been since the 2000s.
This means that while the median price of a house in San Jose has actually come down between 2022 and 2023, the minimum monthly payment has increased from $7,717 to $8,720 this year.
|Rank||Metro Area||State||Median Home Price||Monthly Payment|
|7||New York City||New York||$577,300||$3,739|
|15||Salt Lake City||Utah||$522,700||$2,863|
So to afford a median-priced home in the country, an American needs to earn closer to $100,000 a year, up from $75,500 in 2022. And even then, they would be priced out of owning a home in nearly half of the 50 largest cities in the country.
As a result Americans may yet further delay home ownership. Renting is now a far more attractive option, thanks to the biggest difference between rent and mortgages in over 50 years.
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