The top ten cities where millennials are buying houses are in more affordable places, according to new data from Realtor.com.
While millennials may be attracted to hip cities like San Francisco, Portland, Ore., and Austin, Texas, they aren’t necessarily buying homes there.
Young adults ages 25 to 34 are more inclined to buy in lower-tier, more affordable cities, according to new data from Realtor.com.
Interestingly, Des Moines is the most millennial-friendly city in the United States when it comes to home buyers. About 60% of people who took out a mortgage to buy a house in Iowa’s capital city during the first half of 2015 were millennials. That’s significantly higher than the national average of 37%.
Among the top 10 cities where millennials made up the highest share of first time homeowners, four were in Louisiana. Baton Rouge ranked third, followed by Lafayette in fifth, New Orleans in ninth and Shreveport in 10th.
Other cities in the top 10 were Provo, Utah; Pittsburgh; Grand Rapids, Mich.; Madison, Wis.; and Clarksville, Tenn.
Notably, none of the top ten were from the big states with huge employer bases, such as California, New York, Texas and Florida, presumably because the housing market is more expensive.
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Among the top housing markets, most had median home prices below the national average. During the second quarter of the year, the national median existing single-family home price was $229,400, according to the National Association of Realtors.
Of the 10 millennial-friendly housing market cities, only Provo had a significantly higher median home price. By contrast, San Francisco’s median home price was $738,000.
Historically, people ages 25 to 34 have been the largest group of homebuyers. They have more money than people in their early 20s and, unlike older groups, probably haven’t already bought and settled into a home.
While stubbornly low pay, high student loan debt and a later age to start families has made millennials slower to buy than past generations, things could be changing. Overall, 37% of people who bought a home with a mortgage were millennials, up from 31% in 2014, according to the data.
Millennials are typically quite different buyers than other generational groups. Because they haven’t married or had children yet, they aren’t as focused on buying the house they are going to live in the rest of their lives. They also aren’t as a sentimental about the purchase. Instead, they see it an investment they can sell for a profit in a relatively short amount of time.
