According to data from Construct Coverage, homeownership among millenials is on the rise. From reaching its peak in 2004 of 43 percent, the current rate for 2019 was at 37 percent but seeing steady growth year to year. The most ideal midsize metros were Wichita, Kansas; Mobile, Alabama; and Toledo, Ohio. Pittsburgh, Pennsylvania, was found to be the best large market for millennials.
There are several factors that contribute to the low rate. For example, many millennials are focused on paying off student loan debt and have not yet reached their peak earning potential. According to data from the U.S. Census Bureau, median annual earnings for millennial workers is about $40,000, and while many could potentially afford a mortgage payment, they don’t have the money to make a down payment. In addition, millennials are more likely than previous generations to delay major life events like marriage and children. However, as millennials grow more established in their careers and start families, the homeownership rate for this demographic will likely continue to move up.
That said, when factoring in housing affordability, cost of living, employment opportunities, and forecasted home value growth, some parts of the country are much friendlier to millennial home buyers than others. Overall, the best states for millennial home buyers are in the Midwest and South, especially Oklahoma, Ohio, Arkansas, Iowa, and Nebraska. These states tend to offer more reasonable home prices compared to income, low living costs, and below-average millennial unemployment rates.
The least favorable states for millennial buyers tend to be on the West Coast and in the Northeast, for example, California, Oregon, Massachusetts, and New Jersey. Notably, homeownership rates for millennials are almost ten percentage points higher in the Midwest than in the West.