Based on 2013 Census information for median income, and assuming “an escalation of 2 percent per year” (which is probably generous), the median income for Millennials in LA is $35,027. Mortgage payments are calculated assuming a 20-percent down payment and a 30-year fixed mortgage. The median home value—calculated using Zillow information from the first four months of this year and accounting for single-family, detached houses—is $560,175. Bloomberg finds that, in order to buy that house, a Millennial would need to be making $80,788, which is more than double the median income for their age group.
And the kicker is that Bloomberg is assuming that these young people have even managed to save up the money for that down payment, which is wishful thinking to say the least. “Families where the head of household was under 35 years old had a median net worth of $10,400 in 2013, according to the Federal Reserve’s Survey of Consumer Finances.” So instead of putting money toward something they might eventually own, Millennials probably just end up paying more rent.