Contrary to popular opinion, Millennials are buying homes today and the rate of homeownership among the demographic is going no place but up in the long run as they age. Since 2016, Millennials have been the top homebuyer demographic cohort in the U.S. according to the National Association of Realtors® (NAR). In the latter half of 2017, NAR reported that, while Millennials aged 25 to 34 made up just 13.6 percent of the U.S. population, they accounted for 30 percent of all home purchasers.
Once again I invoke the TINSTAANREM axiom — There Is No Such Thing As A National Real Estate Market. Nor is there such a thing as equal participation of Millennials in home buying across the country. Incomes, rental cost and home prices are but a few factors impacting homeownership rates.
Where are Millennials buying the most homes? To answer this for the third year in a row, smartasset® examined two metrics across the 200 largest cities in the U.S.
- 2016 Millennial Homeownership Rate, with Millennials defined as being under the age of 35
- Change in the Millennial Homeownership Rate from 2007 to 2016, with data taken from the 2007 and 2016 1-Year American Community Surveys
To create the Index, smartasset ranked each of the two metrics across the 200 cities. The average ranking of the two metrics was calculated (each equally weighted). The average rankings were then scored on an index with the highest receiving 100 and the lowest a zero.
The following table shows the top-ranking markets for Millennial homeownership utilizing smartasset’s methodology. There are no major large cities in the top 10.
The respective ranking of the next 15 cities are shown in the following table.
smartasset included the following points:
- Millennial (under the age of 35) homeownership rate was 34.7 percent in 2016
- 72 percent of renters hope to be a homeowner one day – Pew Research Center
- Across the 200 largest cities, just 18 saw Millennial homeownership rates increase from 2007
To read the entire 2018 study from smartasset click https://smartasset.com/mortgage/where-are-millennials-buying-homes-2018-edition
Want to see the changes since 2017? Click https://smartasset.com/mortgage/where-are-millennials-buying-homes-2017-edition to read the prior year findings.
As Millennials age, in my opinion, they will ultimately have a similar percentage of homeownership in the U.S. as we have today. But Millennials are different than Boomers and Gen Xers at the same age. Many Millennials will sign a home purchase contract long before they sign a marriage certificate.
Just as previous generations though, homeownership will likely remain the largest share of wealth among households.