LOS ANGELES (CBSLA.com) — California’s hot housing market is increasingly shutting out millenials looking for their first home purchase, a new study has found.
The Bankrate.com study found that California — thanks to an unusually tight housing supply and uncommonly high homes prices — is the worst state in the country for first-time homebuyers.
One problem for entry-level homebuyers is that since the recession builders have largely focused on the higher end of the market, pegging their products to the rising fortunes of America’s upper middle class, CBS News reported.
In August, San Jose became the first U.S. city in which the single-family median home price surpassed $1 million.
The Bankrate.com study calculated its rankings based on five metrics — housing affordability, the job market for young adults, housing market tightness, credit availibility and “homeownership among the under-35 crowd.”
The next-worst state for first-time homebuyers was Hawaii, followed by New York. Iowa, Utah and Minnesota were deemed the top three states for first-time homebuyers.
“Millennials now hitting prime years for that first home purchase may have to stick to smaller, interior states to find a hospitable homebuying climate,” the study’s authors said in a statement.