Here’s what millennials in Bay Area need to buy a house

Purchasing a home in the Bay Area can seem impossible for potential buyers in their 20s and 30s tangling with sky-high rents and all-cash buyers.

But a new report from LendingTree suggests it is being done — by millennials who have excellent credit scores and six figures in the bank for a down payment.

Easy, right?

Not surprisingly, the $148,100 average down payment made by LendingTree buyers between 23 and 38 years old in the San Jose metro area, which includes Santa Clara and San Benito counties, is the highest among the nation’s 50 largest metros, the report said. The secondhighest was in the San Francisco metro — which includes San Mateo, Alameda and Contra Costa counties — at $139,100.

That’s nearly double the next two highest cities, Los Angeles and San Diego, where average millennial down payments were $81,400 and $67,600, respectively.

“It’s difficult here for people to purchase homes, unlike elsewhere where you can get into something pretty easily once you have a fulltime job and a little bit of savings,” said Jordan Mott, an agent at Intero Real Estate in San Jose who, at 27, is a millennial and bought his first home three years ago.

If the big down payment isn’t hard enough, millennial homebuyers in the Bay Area also need excellent credit to be competitive — residents in that age group had an average score of 720 in the San Jose metro and 719 in the San Francisco metro out of 800. That’s the high

est average credit score for that age group in the country, Lending Tree found.

Still, young buyers have managed to buy in the Bay Area. In the San Jose metro, 55.8 percent of the requests the company got for a mortgage came from people between 23 and 38, the third-highest share in the country, LendingTree reported. In San Francisco, millennials made up 52.1 percent of purchase requests, the 19th

highest share.

Mott said the majority of people in their 20s and early 30s who are able to buy a home in the Bay Area have one thing in common: They work for technology companies.

“(Those buyers) are taking stock options or have been able to save money from their salaries over at these larger tech companies,” he said. “It’s not like we’re seeing teachers buying houses.”

Sometimes parents step in and help new buyers with a down payment, either as a gift or a personal loan repaid over time. But that’s hardly a way to expand

access to housing, said Felicia Mares, an agent with Abio in Oakland.

“That’s great for them but it’s sad because we know people who aren’t from affluent families aren’t receiving that assistance,” Mares said.

Mares, who at 29 is also a millennial, grew up in Richmond and said many of her friends aren’t from wealthy backgrounds. In some cases, those adult children are the ones helping their parents pay the rent or mortgage, not the other way around.

Others are buying with a plan to rent out some of the rooms in their future home to help finance mortgage payments, which Mares called house hacking. While that doesn’t help cross the down payment bridge, it’s a valuable option for keeping up with the mortgage, she said.

That’s what Mott did when he bought his first house at 24 in downtown San Jose.

“I rented out the garage, I got $1,000 off that, (and) that helped offset the mortgage,” he said, adding that it’s still possible to buy a house in the region with less than 20 percent down payment.