Why most San Diego millennials can't afford to buy homes
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Illustration: Brendan Lynch/Axios
Young people in San Diego are struggling to purchase homes without major budget changes or help from family.
Why it matters: Nearly three-quarters of aspiring homebuyers say affordability is the No. 1 obstacle to owning a house, per a Bankrate study.
- The biggest obstacles among millennials who don't already own a home are income, down payment and closing costs, along with high home prices.
Driving the news: A recent Redfin report on "nepo-homebuyers" found 38% of recent buyers under age 30 nationally received family money to afford their down payment.
What they're saying: Locally, there's been an increase in wealth transfer between generations, particularly from boomers, according to Julie Chang, a local agent with Pacific Sotheby's International Realty.
- She's seen an increase in gift money during escrow in the last few years as parents and grandparents move to dole out their inheritances.
- "If you don't have generational wealth, then you're competing against people with generational wealth," Chang told Axios.
Zoom in: Millennial mortgage applications were down 5% in the San Diego metro area for the first half of 2023, compared to the same time last year, according to figures LendingTree shared with Axios.
- The share of mortgage purchase requests from millennials dropped to about 54%, outpacing the national trend.
Zoom out: In the first half of 2022, nearly 52% of LendingTree's mortgage requests across the U.S. came from millennials. In the first half of 2023, it dropped to roughly 50%.
- Yes, but: Millennials still make up a large share of first-time buyers.

What's happening: Mortgage rates have pushed many folks, especially young buyers, out of the market.
- Saving for a home in San Diego can take nearly two decades, as record high prices, elevated interest rates and low inventory make buying a first home difficult.
- Some Gen Zers are moving in with their parents because homeownership feels unattainable.
Reality check: In an expensive city, it's not a given that you'll own your first home before your mid-30s, Chang said.
- It's expensive, takes time and most of the people who have excess cash either owned somewhere else and sold, have intergenerational wealth or dual-incomes with no kids, she noted.
Be smart: Waiting to buy isn't a bad thing. "You can build wealth just fine by renting," says Bankrate chief financial analyst Greg McBride.
- Taking time to save, invest, build your credit and advance in your career can meaningfully improve your financial picture, he says.
- Homeownership "sucks the cash right out of you," at least at first, McBride says. You need to save beyond the initial down payment to weather unexpected additional expenses — the primary reason millennial homeowners have buyers' remorse.

