The Worst Cities for Millennial First-Time Homebuyers

If your interest on this site is any indication, buying your first home is a milestone you’d like to achieve in your future. But for many millennials in the United States, the American Dream has been postponed by towering student loan debt, stagnant wage growth, and exorbitant rental costs. All that being said, millennials are still buying homes more than other generations and in 2017, 38 percent of single-family home purchases were made by first-time homebuyers.

And based on new information, we guess a good chunk of those are buying homes in Chicago, Illinois; Dallas, Texas; Detroit, Michigan; and Baltimore, Maryland. According to a new study from RealEstate.com, these are the best housing markets for millennials. For the study, researchers factored in median household income, annual savings, and the price of a 20 percent down payment on a home in the bottom third of the market. With these factors in mind, all four of these cities would take only a little under four years to save up for a down payment on a median entry-level home.

However, for millennials outside of these cities, saving is a little harder. The analysis also announced the 10 markets where it’s the most difficult for first-time buyers to save up for a down payment. And surprisingly, not all 10 of the places on the list are in the Bay Area. In fact, the place where it takes the longest for twenty-somethings to save up is Portland, Oregon. Though the median home value for entry-level single family homes in Portland is only $347,200—which sounds like a bargain compared to San Jose, California’s $1,133,100—the annual income for workers between the ages of 24 and 36 is only $42,300. Furthermore, Portland-dwelling Millennials are only able to shell away a little over $5,000 each year. All this means that the average Millennial will take 13 years and two months if they save a little more than $100 a week towards a down payment.

And though the Bay Area might not be the absolute worst market for a millennial home buyer (since they’re are making close to six figures there), it’s still up there. California, in general, is not a great place to save, as half of the list features Golden State cities.

Here’s the full list of the 10 worst cities for millennial home buyers:

1. Portland, Oregon
2. Denver, Colorado
3. San Jose, California
4. Riverside, California
5. Miami-Fort Lauderdale, Florida
6. Los Angeles-Long Beach-Anaheim, California
7. San Diego, California
8. San Francisco, California
9. Las Vegas, Nevada
10. Phoenix, Arizona

If you live in one of these cities and dream of homeownership, these facts might be a little depressing. Well, there are two ways to look at it: Though the quick appreciation of these homes might make you want to get in the piece of the action, know that even if you save up for a down payment, get a mortgage, and put in a successful offer, it will still take 14.6 years to break even on a home in San Francisco (and that was based on an average $898,706 home price last year). Though it seems smart to buy instead of rent, it might be a better use of your time just invest your cash and rent (though, obviously, you should talk to your financial planner about what’s best for you!)

If you’re really, really set on becoming a homeowner, there are often organizations in your state—like the California Housing Finance Agency programs and New York’s HomeFirst Down Payment Assistance Programs. There are also low down-payment mortgages supported by the Federal Housing Administration, Veteran Affairs, and the United States Department of Agriculture, which can help you purchase a home at just 3 percent down. Here’s all you need to know about first-time homebuyer grants. But again, even with these programs, additional interest and high monthly payments might mean it makes more sense to invest, so talk to a financial planner about your options.