Millions of millennials all over the country have lost jobs due to the COVID-19 pandemic. If you are among lucky ones still holding a job and you want to buy a home, the National Association of Realtors (NAR) has identified the ten best housing markets for millennials.
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The ten best metro areas identified by the NAR have “favorable conditions for millennial homebuyers” despite the prevailing coronavirus pandemic. The NAR President Vince Malta believes that millennials will play a crucial role in the housing market recovery as cities and states have started re-opening.
Millennials are the largest cohort of homebuyers today. And they prefer certain metro areas to settle down in their own dwelling. The National Association of Realtors analyzed data from the 100 largest metro areas in the United States to identify the ten best housing markets for millennials.
The NAR looked at a variety of factors such as affordability, percentage of millennials in the total population, inventory availability, and the local job market amid the coronavirus pandemic. Each of these metro areas has a relatively smaller share of workforce employed in industries worst affected by the pandemic.
The best housing markets for millennials
These are the ten best housing markets for millennials, according to the National Association of Realtors. They are listed in an alphabetical order:
- Austin-Round Rock, Texas
- Dallas-Fort Worth-Arlington, Texas
- Des Moines-West Des Moines, Iowa
- Durham-Chapel Hill-Raleigh, North Carolina
- Houston-The Woodlands, Texas
- Indianapolis-Carmel-Anderson, Indiana
- Omaha, Nebraska/Council Bluffs, Iowa
- Phoenix-Mesa-Scottsdale, Arizona
- Portland, Oregon/Vancouver, Washington
- Salt Lake City, Utah
Austin, the Live Music Capital of the world, offers plenty of academic and economic opportunities. It’s the fastest growing city in the country. Dallas-Fort Worth area has also been growing rapidly. Houston, another city in Texas, has also made it to the list.
Des Moines and Durham are cities where rent prices are getting cheaper. Buying a home in these cities is not very expensive either. Median home price is $209,200 in Des Moines and $293,800 in Durham. In Omaha, Nebraska, a median house costs only $197,000, far below the $288,455 average in the top 100 metro areas.
Indianapolis has traditionally been a manufacturing hub, but the city has undergone major changes in recent years. It is one of the best places for female businesswomen and entrepreneurs. More than a third of all business owners in Indianapolis are women. The median home price in Indianapolis is $204,000.
The Phoenix-Mesa-Scottsdale region has an unemployment rate of 8% despite the coronavirus pandemic. An estimated 35% millennials in the metro area can afford a home, even though the median home price is relatively higher at $308,900. The cities with the highest median home price on this list are Portland at $416,100 and Salt Lake City at $372,100.
Low unemployment, high millennial population
According to the NAR data, a typical household in the US can afford to purchase 40% of the homes listed for sale, up from 34% last year. But the ratio is much better in the above ten housing markets. For instance, a household in Dallas with annual income of $100,000 can afford to buy 56% of homes listed for sale, up from 45% a year ago.
Lawrence Yun, chief economist at the National Association of Realtors, said in a statement that record-low mortgage rates have made it easier for millennials to afford a house. Yun expects “multiple offers for starter homes” to become common in many of the most attractive housing markets.
Unemployment rate in each of the ten best markets is lower than the national average. That’s because relatively fewer people there are employed in industries most affected by the pandemic and the lockdown. Fewer than 20% people in these cities work in industries affected by COVID-19.
Millennials make up nearly 30% of the population in these metro areas. Yun added that the top ten markets will soon require more new home construction to meet the demand as the economy reopens. His optimism is due to the better employment conditions and relatively higher millennial population in these metro areas.
At the end of April 2020, unemployment rate in the US stood at 14.7%, according to the Bureau of Labor Statistics. Even in the top 100 metro areas employment fell by 13% on average compared to last year. But unemployment rate was just 3% in Portland, 5% in Omaha, and 6% in both Salt Lake City and Durham.