Millennials are now in their prime when buying a home, fueling housing demand in many parts of the country. We asked Emanuel Santa-Donato, VP, Capital Markets and Lead Acquisition at Better.com, to tell us more about the real estate markets that millennials love.
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Where Millennials Buy Homes
Here are the five hottest housing markets for millennial home buyers, as measured by loan application volume in the first quarter of 2021, according to Santa-Donato:
In Seattle, millennials will find plenty of indoor and outdoor activities, a healthy job market, good public transportation, and beautiful tree-lined neighborhoods. The compromise for Seattle’s lush greenery and huge trees is rainfall a little less than half the days in Seattle each year. The temperatures in this coffee paradise are mild all year round and usually range from the 40s to the 70s. One potential downside: At the time of this writing, the median home price was more than double the national median, according to Redfin data.
Atlanta is bigger than you might have thought. The city itself has fewer than half a million residents, but the Atlanta metropolitan area has 6 million people. Here you will find a diverse population and many pleasant neighborhoods. A strong startup culture and many Fortune 500 companies ensure that millennials can find steady job growth and plenty of career opportunities. With an average home price currently just slightly above the national median, Atlanta is one of the more affordable cities on our list.
If you like warm weather Austin, Texas might be for you. Freezing temperatures are rare. What people love about Austin is the live music. Some say you can find live music every night of the week, and that doesn’t include the world famous music festivals that Austin hosts. Tech employers and startups are also big here. When we checked, the average Austin home price was about 50% above the national median.
Houston is another Texas oasis for warm weather lovers. Average high temperatures are just a little lower than Austin’s. This means that there are only a few days each year when it is too cold to enjoy outdoor activities. One of the best things about Houston is the lower cost of living compared to cities of similar size. When we checked, the average home price was about 15% below the national median home price. Many buyers with modest or lower incomes can afford to buy a home in Houston.
Santa-Donato says Houston was number 1 in the country for Gen Z and Gen X home buyers in 2021, but that millennials are flocking to the number 1 city on our list in greater numbers: Chicago.
Chicago. Because pizza.
There are many other reasons to enjoy Chicago. It’s a busy and beautiful city center with excellent public transport and lots of pedestrian-friendly areas. Here you will find everything of world class – museums, companies, congresses, schools and more. You will definitely experience all four seasons, so bring your parka. In many ways, Chicago’s cultural and social events are synonymous with New York City. But you can move here for much less. At the time of this writing, the median home price was roughly the same as the median home price across the country.
What Millennial Home Buyers Want
When you look at the hottest real estate markets for millennials, you will find that many of them share certain characteristics. Here are some of the things millennials want when they buy a home.
Healthy local economy
Millennials put down roots in vibrant neighborhoods. The sense of community is very important, more than the number of square meters. Millennials appreciate community workspaces and a shorter commute (if they have to leave home at all). A 2021 report by the National Association of REALTORS said travel expenses were a top priority for millennial shoppers. The same report shows that more than half of millennials shop in the suburbs.
You may know a few new millennial millionaires who invested smartly early on, but even more millennials are earlier in their careers and can’t compete with buyers in a seven-figure housing market. Affordability is crucial. Santa-Donato says the shopping mix is ââ”moving to the suburbs as customers take advantage of the low interest rates to move outside of metropolitan areas for more space, lower costs of living and a higher quality of life.”
A dead-end house in a good school district has always been desirable, but that may be even more so for growing families emerging from the pandemic. We all want to go out and do things, so ways to enjoy life close to home are more important than ever. Those looking for homes are interested in bike paths, outdoor restaurants, cafes, local music, and playgrounds.
Millennials – and Gen Z – are the main home buyers today
Millennials make up a larger proportion of homebuyers each year. Santa-Donato says that between January and March 2021, more than half of Better’s purchase requests per month came from millennial shoppers. That number is in line with a CoreLogic report that says millennials made up more than half of all buyers in 2020.
Generation Z customers (ages 25 and younger) are hot on the heels of millennials, Santa-Donato told us. These customers “take advantage of historically low interest rates and buy houses across the country,” says Santa-Donato. “The number of Gen Z applications at Better increased 57% from January through March and 124% year over year from March 2020.”
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