Over the last decade, millennials, gen-Xers, and boomers have all been bucking traditional homebuyer trends. These days, those under 35 years of age have typically been waiting longer to buy a home than their parents before them. Boomers, typically reliable for staying in their family homes until they pass them onto their heirs, are selling their homes and downsizing to condos.
Just take a look at the numbers. Right now, there are fewer homeowners in the U.S. than at any other time in a half a century. In many of the major markets across the country, a whopping two-thirds of the population is made up of renters, not buyers.
Add to that the steady increase in home prices over the last few years with some markets estimating an increase of 4.5% over the next year. Rising home prices can be good news for investors– but who is buying?
Although rising home prices and high student loan debt are affecting the ability for millennials to purchase their first home, a stronger job market and healthy overall economy are helping some young buyers purchase their first home. We took a look at a recent LendingTree Study analyzing mortgage requests, loan amounts and housing costs for buyers under 35. These five cities are currently the hottest markets in the country based on rankings generated from the percentage of total purchase mortgage requests received by LendingTree from borrowers in the millennial generation.
#1: Pittsburgh, Pennsylvania
Lending Tree recently conducted a study that found that millennials are finally taking their place in the homebuyer pool, though not at the same rate as previous generations. Since last August, the number of millennials applying for mortgages has increased to nearly 50% in Pittsburgh, Pennsylvania and the average loan amount requested by young borrowers was $201,921.
#2: Washington, DC.
The nation’s capital is another area where millennials are pushing the number of homebuyers up, making up about 47% of home loan applicants last year. On average, these millennials are putting down over $80K on a new home in Washington, D.C. and the average loan amount was a whopping $381,110.
#3: Des Moines, Iowa
The cost of living is attracting millennial homebuyers to Des Moines, Iowa. There, buyers only need around $25K for a down payment for the average loan amount of $173,439. Over the last year, millennials accounted for 46% of the homebuyer pool in Des Moines.
#4: Boston, Massachusetts
What is evident from Lending Tree’s survey is that California and New York’s rising home prices have slowed home buying in those areas. Boston is picking up the slack from New York’s homebuyers, with an average home price that is 2% below market.
#5: Saint Louis, Missouri
The Midwest is seeing a surge in new homebuyers. Millennials made up 45% of homebuyers in St. Louis last year. Just behind St. Louis in the Midwest were Omaha, Chicago, Cincinnati, and Minneapolis.
The Full List
For flippers, these markets hold a host of opportunity. Where demand is high, single-family real estate investors can see great success and quick sales. Here’s the full list of the Top 100 Most Popular Cities for Millennial Homebuyers.
