Homebuyer Concerns: Are Cities Affordable for Millennials?
Where Can the Newest Generation of Homebuyers Afford to Buy?
Millennials have been getting a bad rap for a few years now. This young group of Americans is often viewed by older generations as irresponsible, too tech-dependent, and often, just downright lazy. But this group, which numbers more than 74.9 million, has recently overtaken baby boomers as the largest generation in the United States, according to the Pew Research Center. And, they are poised to be entering the housing market any day now.
But, with America’s economy still trying to find its legs and millennials on average making about $10,000 less than employees of all other generations (according to Business Insider), is there anywhere a millennial can afford to live these days?
Millennial Home Buyers Worry About Affordability Over All Other Concerns
In a recent survey, millennials were asked what they were concerned about most when it came to buying a home. The top five answers provided included:
- Affordability: 32.5%
- Competition: 16%
- Inventory: 12%
- Down Payment: 10.3%
- No Concerns: 7%
In that same survey, millennial first-time homebuyers were asked what the driving factor was for their home buying decisions and a whopping 45.5% answered “rent was too high.”
Surprise! Millennials Buy More Homes Than Any Other Generation
Despite being concerned about affording their homes, millennials actually accounted for the largest group of home buyers in 2015 with 35% of all homes being purchased by this population group. In fact, 2015 made for the third consecutive year that millennials were the largest home-buying group in the United States and 2016 looks to make it four consecutive years. And, on an interesting note, the younger the buyer, the older the home that’s being bought.
But, in 2016, studies are showing that millennials are making a shift from city center and other urban areas to the suburbs. The reason for the change in locale is entirely affordability-based, with millennials simply finding it difficult to afford the high cost of inner-city living.
Five Best Cities for Millennials to Buy a Home
Austin, TX: With a motto like “Keep Austin Weird,” it’s no wonder why millennials fit in perfectly in this eclectic city. But, Austin actually has a lot of things millennials are looking for, like a low unemployment rate and a relatively affordable median home price of $247,500.
Minneapolis, MN: Minneapolis is often rated as the most well-read city in America, and with its diverse cultural scene and creative energy, it’s the perfect place for the millennial generation. Throw in its low unemployment rate and affordable housing stock (median home price: $212,900) and it’s practically irresistible.
Denver, CO: Denver’s slightly higher-than-average unemployment rate of 5.9% makes it a stretch for millennials looking for work, and its median home price of over $316,000 does present an obstacle, but for millennials willing to work past them, the city is one of the top millennial-friendly cities in the country.
Seattle, WA: With its exciting culture, culinary scene, and entertainment options, Seattle is a millennial’s dream city. The housing stock is kind of expensive here, with a median home price of $357,400 and the unemployment rate is 5.6%, but Seattle has so much going for it that many young homebuyers are willing to work extra hard for it.
New Orleans, LA: Still fighting its way back from Hurricane Katrina, New Orleans is making strides back to greatness with plenty of help from the millennial generation. Drawn to the city by its culture, cuisine, and lore, in addition to well-meaning intentions for helping the city recover, millennials who move to the Big Easy enjoy a low 4.8% unemployment rate and affordable housing ($168,900 median home price).
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