Growth in home prices continued wearing down affordability at the start of the season, preventing first-time buyers from entering the housing market.
Property values jumped 6.8% year-over-over and 0.7% month-over-month in June, according to CoreLogic's Home Price Index, pricing some consumers out of the market.
"One-third of millennial renters reported feeling they cannot afford a down payment to buy a home," Frank Martell, president and CEO of CoreLogic, said in a press release.
"With home prices rising quickly over the past few years and supplies low, first-time homebuyers face ever-growing challenges to find and buy affordable entry-level homes. More needs to be done to help our first-time buyers join the homeownership class," he added.
Younger millennials, referring to those under age 29, are much more likely to want to own a home in the next 12 months than older millennials or Generation X renters, but 63% of younger millennials are uninterested in a home purchase because of their inability to afford a house or down payment, according to a CoreLogic study conducted with market research company RTi Research.
"The rise in home prices and interest rates over the past year have eroded affordability and are beginning to slow existing-home sales in some markets," said Frank Nothaft, chief economist for CoreLogic.
"For June, we found in CoreLogic public records data that home sales in the San Francisco Bay Area and Southern California were down 9% and 12%, respectively, from one year earlier. Further increases in home prices and mortgage rates over the next year will likely dampen sales and home price growth," he continued.
House values are projected to rise another 5.1% from June 2018 to June 2019, according to CoreLogic estimates.