Top 5 Housing Markets Attracting Millennials
Mar 18, 2016
As home prices in trendy urban areas like DC, New York City, and San Francisco skyrocket, young buyers may be looking elsewhere — to where they can actually afford to buy, notes a recent article in Fortune.
Those preferences have kept many young buyers searching for homes that are affordable in the middle of the country and avoiding the two coasts “where housing prices have been rising steadily in the recovery,” says Fortune.
A CoreLogic study analyzed more than 70 metrics associated with mortgage purchases by young homebuyers and ranked all counties with a population greater than 200,000. Among the statistics included in the analysis: loan application data, mortgage interest rates in different counties, the number of foreclosures in the state, and the education level of its Millennials.
The study’s top markets tended to have one metric in common: Millennial homebuyers were able to negotiate attractive front-end ratios on mortgages, a statistic that indicates the portion of a borrower’s income necessary to cover monthly mortgage payments. The percentage is calculated by dividing monthly housing expenses by gross income.
It’s a sign that affordability and income are pivotal factors for Millennials when it comes to where they buy a home, CoreLogic analyst Bret Fortenberry told Fortune.
According to CoreLogic, these are the top markets where Millennials are buying homes:
1. Utah County, UT
The median home value is about $229,600, according to Zillow. Utah County is also enjoying the fastest employment growth among the 342 largest U.S. counties, according to the U.S. Bureau of Labor Statistics, up by 6.7 percent in 2015 as the county added more jobs in the trade, transportation, and utilities sectors. Millennials, many of whom were born there and opted to stay to raise families, have been the largest generation in Utah since 2000, according to a study done by the Utah Foundation.
2. Denver County, CO
Denver has enjoyed one of the stronger local economies since the housing collapse, says Jonathan Smoke, chief economist at the National Association of REALTORS®. Metro area unemployment is below average, while job growth is higher. Denver has already recovered all the jobs lost in the recession — and this has helped fuel a hot housing market. The median home value in Denver is $331,100, says Zillow. Denver home values have gone up 12.8 percent over the past year, and Zillow predicts they will rise 4.9 percent within the next year.
3. Kent County, MI
Kent County is the economic and manufacturing center of West Michigan, with the Steelcase Corporation based in the county. It is also the home of the Frederik Meijer Gardens, a significant cultural landmark of the Midwest. About 40 percent of residents are ages 18-34. Zillow reports the median home value in Kent County is $150,200. Kent County home values have gone up 7.7 percent over the past year, and Zillow predicts they will rise 2.9 percent within the next year.
4. Weber County, UT
Weber County includes a wide swath of land running from the Wasatch Mountains on the east to the Great Salt Lake on the west and includes the cities of Ogden and Provo–Orem. There is a university in Ogden, and local employers include several ski and winter sports companies, the U.S. Forest Service, the IRS, and the McKay-Dee and St. Benedict’s hospitals. Zillow says the median home value in Weber County is $171,700. Weber County home values have gone up 7.6 percent over the past year, and Zillow predicts they will rise 4.8 percent within the next year.
5. Polk County, IA
Polk County, named after President James K. Polk, is the most populated county in Iowa and includes the city of Des Moines. As previously reported in The Home Story, there are jobs to be had and an affordable lifestyle to be enjoyed. Tech giants such as Facebook and Microsoft have set up shop around the city and have helped redefine Des Moines as a major player in the “Silicon Prairie” of the Midwest. According to Zillow, the median home value in Polk County is $155,500. Polk County home values have gone up 4.8 percent over the past year, and Zillow predicts they will rise 3 percent within the next year.