Current housing conditions have kept out some young buyers, but certain markets have prime conditions for millennial buyers T he homeownership rate fell to 64.7 percent in the second quarter of 2014, matching a nearly 20-year low, according to the U.S. Census Bureau. One reason: fewer first-time buyers.
The percent share of first-time buyers in July was 29 percent, according to the National Association of Realtors, up 1 percent from June but still well below historical standards, which the NAR puts around 40 percent.
Rising home prices and tight credit are among the constraints keeping younger first-time buyers out of the market. Yet, some metro areas are well positioned to see an increase in millennial first-time buyers in years to come — especially in the West and Midwest.
The NAR analyzed housing conditions, job creation and population trends in metropolitan statistical areas to pinpoint the best markets for millennial first-time buyers. Austin, Texas, and Salt Lake City were the top metros for millennials, with young adult populations, solid job-growth rates and affordable home prices.
The homeownership rate for young adults under age 35 peaked at 43 percent in 2005; it was 36 percent in first quarter of 2014, according to the NAR.
Based on the NAR analysis — which looked at 100 metro areas with a strong millennial presence, solid job market, strong migration patterns of young adults moving to the area, and housing inventory affordability and inventory — the 10 best purchase markets for potential millennial homebuyers are, alphabetically:
Austin, Texas
Dallas
Denver
Des Moines, Iowa
Grand Rapids, Michigan
Minneapolis
New Orleans
Ogden, Utah
Salt Lake City
Seattle
Other strong markets for attracting millennial buyers include:
Madison, Wisconsin
Nashville, Tennessee
Omaha, Nebraska
Raleigh, North Carolina
Washington, D.C.
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