How much housing can a millennial afford?

Much has been said about why millennials aren’t buying homes.

The most likely option is that they can’t afford them, according to a recent report by SmartAsset.

“With wages stagnant and the cost of education chipping away at savings, many young people cannot afford to buy a home,” the report stated.

In the third quarter of 2015, the rate of homeownership for people under the age of 35 was 35.8 percent. Twenty years ago, in 1995, it was 39.1 percent. A decade ago, in 2005, it was 43 percent.

SmartAsset collected data on the median income and median net worth for millennial Americans, and used a home affordability calculator to determine an affordable cost of a home in the largest 23 cities across the country. They also considered the average price per square foot of real estate in each city to determine how large a home each value represents.

As one of the largest cities, Philadelphia’s home cost was analyzed. The median income for a millennial in the city is $39,143, and the median net worth is $1,617. Thus, a millennial would only be able to afford a 497 square foot home with a value of $45,700. According to the report, the low median net worth, which is less than a quarter of the national average, is what hinders millennials from purchasing a home there. Many millennials in Philadelphia are unable to come up with a down payment for a home.

The report also theorizes that the housing market crash may have altered the perception of homeownership amongst millennials. Additionally, homeownership is a commitment to an area, which some millennials aren’t ready to make, so they rent until they know they wish to stay in an area.