Millennials are now at the peak of home buying, which is driving demand for housing in many parts of the country. We asked Emanuel Santa Donato, VP of Capital Markets and Lead Acquisition at Better.com to tell us more about the housing markets that millennials love.
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Where Millennials Buy Homes
According to Santa Donato, here are the top five most popular housing markets for millennial homebuyers, measured by loan applications in the first quarter of 2021:
In Seattle, millennials find plenty of indoor and outdoor activities, a healthy job market, good public transportation, and beautiful forested areas. The trade-off for Seattle’s lush greenery and giant trees is just under half of the days a year in Seattle. Temperatures in this coffee paradise are mild all year round, mostly between 40 and 70. One potential downside: According to Redfin, at the time of this writing, the median home price is more than double the national median.
Atlanta is bigger than you might think. The city itself is home to less than half a million people, but the Atlanta metro area is home to 6 million. Here you will find a diverse population and many pleasant neighborhoods. A strong startup culture and many Fortune 500 companies mean millennials can find steady growth in employment and a plethora of professional opportunities. The average home price is currently only slightly above the national average, making Atlanta one of the more affordable cities on our list.
If you enjoy warm weather, Austin, Texas may be for you. Freezing is rare. What people love in Austin is the live music. Some say that live music can be found every night of the week, and that’s not counting the world famous music festivals that are held in Austin. Tech employers and startups are big here too. When we checked, the average home price in Austin was about 50% higher than the national median price.
Houston is another Texas oasis for warm weather lovers. Average high temperatures are slightly lower than Austin. This means that there are several days a year when it is too cold to be active. One of the best things about Houston is the lower cost of living when compared to cities of a similar size. When we checked, the average home price was about 15% below the national average. Many buyers with modest or low income can afford to buy a home in Houston.
Santa Donato says that Houston ranked first in the country for generation Z and X homebuyers in 2021, but that millennials are increasingly flocking to the # 1 city on our list: Chicago.
Chicago. Because pizza.
There are many other reasons to enjoy Chicago. It is a lively and beautiful urban center with excellent public transport links and many pedestrian areas. Here you will find everything world class – museums, businesses, conventions, schools and more. You will definitely be able to experience all four seasons, so bring a parka with you. In many ways, Chicago’s cultural and social events put it on a par with New York. But moving here can be much cheaper. At the time of this writing, the median home price was about the same as the median home price across the country.
What Millennial Home Buyers Want
When you look at the most popular home buying markets for millennials, you will find that many of them have certain characteristics. Here are some of the things millennials want when shopping for their homes.
Healthy local economy
Millennials are taking root in busy neighborhoods. A sense of community is more of a priority than square feet. Millennials value community jobs and shorter commutes to work (if they have to leave home for work at all). 2021 Report by the National Association of REALTORS said road costs are 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 newly minted millennial millionaires who invested early and smartly, but even more millennials started their careers earlier and can’t compete with buyers in the seven-figure housing market. Accessibility is critical. Santa Donato says the range of purchases is “shifting to suburban areas as customers benefit from low interest rates to settle outside urban areas to get more space, lower cost of living and a higher quality of life.”
A dead end home in a good school district has always been desirable, but it may be even more urgent for growing families emerging from the pandemic. We all want to go out and do something, so being able to enjoy life close to home is more important than ever. Those who shop for the home are addicted to bike paths, outdoor dining, cafes, local music and playgrounds.
Millennials – and Gen Z – are major home buyers today
Millennials make up an increasing proportion of home buyers every year. Santa Donato says more than half of Better purchases per month between January and March 2021 came from millennial shoppers. This number lives on with CoreLogic Report This suggests that millennials made up over half of all shoppers in 2020.
Santa Donato told us that Gen Z customers (ages 25 and under) are on the heels of millennials. These clients “enjoy historically low interest rates and buy homes across the country,” says Santa Donato. “The number of Gen Z apps in Better has increased 57% from January to March and 124% year over year since March 2020.”
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