Millennials have been notably absent from the housing market, but when they do start buying homes, some of the most favorable areas for them to do so are clustered in the Midwest and West.
Seven of the top 15 metropolitan housing markets for Millennials aspiring to become homeowners were identified in the Midwest, according to a recent study by the National Association of Realtors (NAR), while four of the top 10 were found in the West.
The study looked at 100 metropolitan areas with a strong Millenennial presence and inbound migration patterns. It analyzed current housing conditions and affordability, job creation and population trends to determine which areas offer the best purchase prospects for young buyers.
"Limited job prospects, student debt and flat wage growth have combined with tight credit conditions and low inventory to price Millennials out of some of the top cities such as New York and San Francisco," said Lawrence Yun, NAR chief economist, in discussing the study. "However, NAR research finds that there are other metro areas Millennials are moving to where job growth is strong and homeownership is more attainable. These markets are well-positioned to soon experience a rise in first-time buyers as the economy improves."
The home ownership rate for adults under the age of 35 is currently 36 percent, having fallen from a peak of 43 percent in 2005.
Listed alphabetically, the top 10 markets for Millenennial home buyers were found to be:
- Austin, Texas
- Des Moines, Iowa
- Grand Rapids, Michigan
- New Orleans
- Ogden, Utah
- Salt Lake City
Other markets identified with strong potential for Millennial homebuyers were Madison, Wisconsin; Nashville, Tennessee; Omaha, Nebraska; Raleigh, North Carolina and Washington, D.C.
Austin and Salt Lake City stood out in particular for having young populations with growing job rates and home prices that have remained fairly affordable. Grand Rapids, Minneapolis and Des Moines led the top 10 in affordability, while Grand Rapids, Austin and Dallas led in rates of private job creation over the past year.