from ZeroHedge
Millennial homeownership rates are essential to understanding the housing market because they facilitate additional home sales for other people.
Millennial homeownership rates are essential to understanding the housing market because they facilitate additional home sales for other people.
How does this work? As HowMuch.net explains,
suppose you make an offer on a house. The current owner is also probably on the
market, and he or she likely has a contingent offer on another house. This sets
off a chain reaction throughout the economy. Millennial home ownership rates are therefore an easy way to judge
the economic vitality of any given area.
That’s why HowMuch.net created
this new map...
Our viz takes millennial
homeownership data from Abodo and
maps it by metro area across the country.Abodo adopted the data
from the U.S. Census Bureau, which regularly collects a variety of information
about the population, including the age of homeowners, the estimated value of
their homes, and how long it would take to accumulate a 20% down payment. Our
numbers are from 2015. We then overlaid this information across metro areas
with bubbles representing the portion of millennial homeowners in each market:
the bigger the bubble, the more millennial homeowners there are. We also
color-coded each bubble to represent the median value of their homes—dark red
circles mean the homes are worth over $500k, and dark blue means under $200k.
This gives you a quick snapshot of the overall economy and the housing market.
The first trend you can see on
the map is a clustering of red circles on both the West Coast and along the
Northeast.
The most expensive city in the
country for millennials is San Jose, CA, where the average millennial buys a
home worth $737,077. Seattle, WA in the Northwest is also relatively
expensive at $342,769. These are population-dense areas with booming tech
sectors. At the other end of the spectrum, you can see clusters of blue bubbles
across the Midwest in old manufacturing cities like Detroit, MI ($148,404) and
Cleveland, OH ($160,251). Memphis, TN is the cheapest
place for millennials at $142,795. Southern states like
Texas and Florida are also relatively affordable thanks in large part to their
suburban sprawl, which Zillow predicts
will expand next year.
It’s
no surprise that homes are more expensive in California (think Silicon Valley)
than the industrial heartland, but consider how homeownership rates change
based on affordability. The red bubbles all tend to be smaller than the blue
bubbles. This means that as homes get more expensive, millennials become
increasingly unable to afford them. It’s not like there’s
a surplus of ultra-rich millennials buying up all the houses in California and
New York. Millennials are just as sensitive to high prices as everyone else.
Let’s
break the map down into a top ten list of the urban areas with the highest
rates of millennial homeownership, combined with the average price of their
home. A full 42% of the millennials living in Minneapolis-St. Paul, MN
own their own home, the highest rate in the country.
1.
Minneapolis-St. Paul-Bloomington, MN-WI: 42.4% and $222,528
2. St. Louis, MO-IL:
40.2% and $167,791
3.
Detroit-Warren-Dearborn, MI: 40.2% and $148,404
4. Louisville/Jefferson
County, KY-IN: 38.5% and $158,974
5. Pittsburgh, PA:
37.5% and $152,731
6.
Indianapolis-Carmel-Anderson, IN: 37.4% and $161,856
7. Kansas City, MO-KS:
37.1% and $170,254
8.
Nashville-Davidson--Murfreesboro-Franklin, TN: 37.0% and $213,090
9. Oklahoma City, OK:
36.7% and $172,485
10. Baltimore-Columbia-Towson,
MD: 36.3% and $272,805
Buying
a home is often the biggest financial decision anybody makes, and that’s
especially true for young people. And there’s a lot to consider when buying
your first home, but one thing other than affordability to keep in mind is how
many other millennials are in the same situation. If you’re a millennial looking
to buy a home, and you want to live next to other young people, you just might
have to move to the Midwest.
