Millennials seeking homeownership are taking a close look at Denver – and many are stepping up to buy.
The Colorado city is the No. 3 best city in the U.S. for young home buyers to purchase a home, according to a recent report from the National Association of Realtors®. The association looked at employment, population, income, and housing condition data in the nation’s biggest metro areas to arrive at the top 10 list. The top two cities are Austin, TX, and Charleston, SC, ranked first and second on the list, respectively. Denver’s boomtown reputation, characterized by young adults streaming in, is supported by the numbers. The area had the second largest number of millennials moving in, with a 27.7 percent share of movers in the millennial age range compared to movers of any age. And job growth, at 3.2 percent, exceeded the average of 100 metro areas (2.5 percent) by nearly one percent.
The millennial generation is made up of people born from 1981 to 1997, today ranging in age from 19-35, according to the Pew Research Center. Millennials are now the nations largest living generation, PRC reported in April 2016. Population growth is at the root of the area’s tight inventory, which has resulted in rapidly rising rents and the comparatively high average median home price of $ 500,000, the report said. Even so, 22 percent of millennials who recently moved to the area owned a house. The homeownership rate was higher than the average homeownership rate for the 100 largest metro areas. While Denver home prices are higher than other cities on the top 10 list, home prices are still lower than in California, the point of origin for many of Denver’s young adult newcomers, according to realtor.com.
“The millennial generation’s move into homeownership is one of the most important drivers of the real estate market over the next 15 to 20 years,” says Chief Economist Jonathan Smoke of realtor.com®.
Smoke says younger home buyers will purchase about 2 million homes this year, or about one-third of U.S. home sales. Other cities rounding out the top five: Charleston, SC; Minneapolis; and Ogden, UT. As in Denver, millennials are moving steadily to Austin and make-up 18 percent of the population. The median home listing price in the city sits at $ 430,000, according to realtor.com. Next are the cities of Charleston, SC, with a median home price of $ 325,000, and Minneapolis, MN, and Ogden, UT, with median home prices of $ 255,000 and $ 220,000, respectively, reported realtor.com.
New York and San Francisco did not make the top 10, which realtor.com attributes to ‘astronomical’ home prices and costs of living.
“Even with potentially higher incomes, prospective millennial home buyers residing in some of the most expensive cities in the country face the onerous task of paying steep rents while trying to save for an adequate down payment,” NAR Chief Economist Lawrence Yun said in a statement. “However, for those currently living in or looking to move to a more affordable part of the country, there are metro areas right now with solid job growth and that offer a smoother path to homeownership.”
For the full report, visit http://www.realtor.com/news/real-estate-news/millennial-cities amp; http://www.pewresearch.org/fact-tank/2016/04/25/millennials-overtake-baby-boomers .
RE/MAX of Boulder Real Estate Blog
* Article originally posted on RE/MAX Boulder website at http://www.boulderco.com/blog/
