Market Trends & ResearchA Generational Wealth Gap: Is Housing Affordable for Young People in Your...

A Generational Wealth Gap: Is Housing Affordable for Young People in Your Area?

As housing prices have skyrocketed across the country, young Americans have felt the dream of homeownership quickly slipping away. However, as Millennials and Gen Zers voiced their frustrations, their parents and grandparents fired back, suggesting that buying a home years ago was just as expensive. This exchange has sparked a generational clash, igniting tensions and passionate discussions between both sides.

Our February study covers the generational wealth gap by state. It shows that housing across America is far less affordable now than when previous generations purchased their first homes, even when adjusting for household income. In many areas, however, the real estate market is drastically different from the rest of the state. We, therefore, set out to find out how bad housing affordability has worsened for Millennials and Gen Zers in some of the largest metros in the country.

Metros With the Largest Changes Between 1970 and 2022

While housing nationwide has become significantly more expensive, certain metros were more affected, especially those that have experienced significant population growth in the past five decades.

Our February study highlights that California had the largest percentage increase in housing multiple since 1970. Therefore, it may not be surprising to learn that the top five metros with the largest changes in housing affordability are all located in California. But exactly how bad is it?

Housing affordability is 3.5 times worse in Los Angeles, the second-largest metro in the country, with the housing multiple rising from 2.22 to a whopping 7.64 in 2022. In San Jose, a metro with some of the most substantial population growths in the past 50 years thanks to the booming tech industry, the housing multiple went from 2.19 in 1970 to 7.44 in 2022. This means it’s 3.4 times harder for the young generations to afford a home than their parents and grandparents.

  • Los Angeles Metro: 244.81%
  • San Jose Metro: 239.5%
  • San Francisco Metro: 205.69%
  • San Diego Metro: 194.8%
  • Sacramento Metro: 176.81%
  • Portland Metro: 174.77%
  • Seattle Metro: 165.55%
  • Denver Metro: 143.98%
  • Jacksonville Metro: 126.12%
  • Salt Lake City Metro: 123.81%

Metros With the Smallest Changes Between 1970 and 2022

Housing affordability, however, has remained stable in some metros. Chicago is one great example, where, despite its size as the third-largest metropolitan area, its housing multiple has not changed as drastically as other major metro areas. Chicago’s housing multiple grew only 33% from 2.05 to 2.72 since 1970, making it the sixth most affordable area in our list. The lack of growth in real estate is likely due to the weak population growth the metro has experienced. High property taxes, in the meantime, are also a significant burden for prospective homebuyers, which puts pressure on the prices sellers can ask for.

The Cleveland metro has also maintained its affordability over the past five decades. In 1970, the housing multiple, based on a median owner value of $22,900 and median families income of $11,399, was 2.01. It has since increased by just 4% to 2.10.

  • Cleveland Metro: 4.41%
  • Hartford Metro: 21.17%
  • Pittsburgh Metro: 26.04%
  • New Orleans Metro: 28.34%
  • Cincinnati Metro: 30.84%
  • Chicago Metro: 32.94%
  • St. Louis Metro: 43.69%
  • Columbus Metro: 43.77%
  • Milwaukee Metro: 44.84%
  • Detroit Metro: 46.33%

Metros with the Highest Housing Multiple

The list below highlights the 10 metros with the highest housing multiple in 2022. It’s worth noting that five of the metros are located in California. Meanwhile, New York, the largest metro in the nation, ranks 7th, right behind Seattle, which has also seen tremendous growth in the past few decades thanks to the tech boom.

  1. Los Angeles Metro: 7.64x
  2. San Jose Metro: 7.44x
  3. Honolulu Metro: 7.07x
  4. San Francisco Metro: 6.97x
  5. San Diego Metro: 6.49x
  6. Seattle Metro: 4.92x
  7. New York Metro: 4.86x
  8. Sacramento Metro: 4.78x
  9. Miami Metro: 4.59x
  10. Las Vegas Metro: 4.48x

Full Data

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