Demographic and housing trends are inextricably linked, with demographic shifts often serving as a leading indicator of housing market dynamics. Understanding these shifts, particularly among the two largest generational cohorts—millennials and baby boomers—is essential to navigating the complexities of today’s housing market.
Millennials surpassed baby boomers as the largest home-buying generation in 2014, and their preferences and economic circumstances have been setting the tone in many markets. Millennials have been characterized by delayed life events, including homeownership, but are now increasingly looking to settle down as they age. As millennials seek to establish roots and grow their families, they are gravitating towards markets that offer a blend of affordability, job opportunities, and lifestyle amenities.
At the same time, baby boomers, many of whom have already or are approaching retirement, are beginning to make moves that reflect their changing needs. Notably, Zonda research reveals that 25% of baby boomers plan to retire near their children and grandchildren—a trend that underscores a significant demographic shift where the younger generation’s migration patterns directly influence those of their parents. This has given rise to a phenomenon where baby boomers follow millennials, both to be near their grandchildren and to take advantage of the market attributes that appeal to both generations.
Recognizing these intergenerational migration patterns prompted the creation of Zonda’s annual Baby Chaser Index. The index looks at where there’s the most overlap between millennials and baby boomers currently and historically.
The latest results from the Baby Chaser Index reveal:
- Austin, Texas, has been in the top spot for four out of the last five years, despite challenges like rising living costs and a softening tech sector. The state capital continues to draw millennials and has a growing boomer population, attracted by its labor market and Texas hill country lifestyle.
- Three out of 10 were in Texas. Two other Texas markets, Dallas and Houston, landed in the top 10 this year, while San Antonio ranked No. 11.
- Charleston climbed to No. 2 in the rankings and saw the second-highest year-over-year growth in its millennial population (2.6%).
- Boise and Orlando both dropped four positions in 2023 due to slower year-over-year growth among both boomers and millennials.
- Jacksonville secured the No. 3 spot, driven by a year-over-year increase in millennials and strong long-term migration.
- Concentration along smile states. Boise was the only 2023 Baby Chaser market not located across southern states.
Texas: A Magnet for Affordability and Lifestyle
Texas dominated the 2023 Baby Chaser Index, with Austin at No. 1, Dallas at No. 4, and Houston at No. 10. According to Bryan Glasshagel, senior vice president at Zonda Advisory and Texas expert, "Texas’ strength continues to be its ability to attract migrants from more expensive coastal markets, coupled with strong job growth."
Austin, in particular, remains a standout market. Despite the challenges faced by the tech sector, Austin’s desirable lifestyle and established tech ecosystem kept it at the top of the Baby Chaser Index for the fifth consecutive year. Glasshagel notes, "Austin’s unique mix of a vibrant city life and the relaxing Texas hill country attracts newcomers of all ages, including baby boomers who are following their children (and grandchildren) and those who are independently drawn to the area’s charm."
Relative affordability drives the appeal of Dallas and Houston, as well as diversified economies and housing options. For example, Dallas and Houston lead the country for the most master-planned communities (MPC), per Zonda’s Master Plan Outlook report. The benefits of these MPCs—including great design, walking trails, nearby schools, community gatherings, fitness centers, resort-style pools, and local dining options—are appealing to both ends of the demographic barbell.
The Carolinas: Strong Fundamentals Meet Coastal Appeal
Charleston's rise to No. 2 in the Baby Chaser Index reflects its draw for both millennials and baby boomers: it offers coastal proximity, excellent dining, and old-world charm. The city ranked eighth and seventh on the index the two prior years. Shaun McCutcheon, a vice president with Zonda Advisory and Carolinas expert, said he wasn’t surprised to see Charleston high on the list. He said, “the market has a lot going for it, including healthy employment drivers, miles of coastline, and culture. Charleston is one of those places that is a great place to visit but also a great place to live.”
For residents and newcomers, one thing stands out about Charleston’s housing market—the bifurcation. The coastal areas, characterized by higher prices and strong demand from wealthier individuals, face constraints due to limited land availability and strict development restrictions. In contrast, the inland regions offer more affordable housing options, resulting in a more diverse range of buyers, including first-time home buyers and young families attracted to the new-home communities and master-planned developments.
Besides South Carolina, North Carolina also saw strong representation in this year’s Baby Chaser Index, with both Raleigh (No. 5) and Charlotte (No. 8) ranking in the top 10. Raleigh is a well-established market with three large universities, many city centers—think Raleigh, Durham, Chapel Hill—and strong job growth.
Charlotte, by contrast, draws more of its in-migration from the East Coast, in part because of its status as a Southeastern financial center. The market also benefits from excellent connectivity via the Charlotte Douglas International airport, the sixth busiest in the nation and an American Airlines hub. Convenient flight access is a draw for millennials who need to travel frequently for work, as well as baby boomers looking for connectivity, including a quick Caribbean getaway.
The Carolinas have long been known as “half-back” locations. These are markets where those that previously lived in the Northeast or Midwest and moved down to Florida decide to move to following a stint in the Sunshine State. McCutcheon notes that builders in the Carolinas have seen an uptick in traffic recently in response to rising costs and insurance challenges in Florida.
Florida: Flipping the Baby Chaser Script
While some in Florida are exploring living in other parts of the Southeast, two Florida markets landed in the top 10 of the Baby Chaser Index. Baby boomers are the pivotal part of Florida’s story. Susan Heffron, a vice president with Zonda Advisory and Florida expert, explains, “Florida is seeing what could be termed a 'grandparent chaser' phenomenon, where millennials are moving closer to their baby boomer parents for childcare support."
This trend is evident in Jacksonville’s rise to No. 3 on the Baby Chaser Index, where the city has seen stronger short-term migration among millennials than baby boomers, although long-term growth is strong for both generations. Jacksonville also holds strong appeal as it offers one of the lowest average housing costs among Florida markets, while still offering coastal access.
Orlando, ranked No. 7, continues to expand, and Heffron notes a broader regional trend where "Orlando, Lakeland, and Tampa are becoming a 'mega-market' and buyers consider these metros somewhat interchangeably." Orlando's long-term migration trends show significant growth, with boomers increasing by 68% and millennials by 37% since 2010, underscoring its appeal across generations.
Honorable Mention: Oklahoma City
Oklahoma City ranked No. 9 this year and has consistently ranked in the top 10 since 2020 under our new Baby Chaser methodology. The market’s recent economic growth, supported by government initiatives and major upcoming projects, including the new OKC Thunder Arena and the proposed Legends Tower, which, if built, would be the tallest building in the nation, positions it as a Baby Chaser market to watch.
Affordability remains Oklahoma City's strongest draw, especially in comparison to rising costs across the country. Local sources say that while places like Colorado or Idaho were often viewed as top states for those looking to escape the high costs and congestion of coastal cities, Oklahoma and Arkansas have gained prominence following the pandemic.
The city is attracting a diverse range of buyers, including those frustrated by high home prices and higher insurance and property taxes in other states, as well as individuals returning to their roots or seeking a more financially accessible lifestyle. As Oklahoma City prepares to host part of the Los Angeles Summer Olympics in 2028, we predict that the market’s appeal and profile will rise even further.
Looking Ahead: Challenges and Opportunities
The Baby Chaser Index highlights markets with strong migration trends that continue to foster economic growth and housing development, with more than half of the top-ranked markets also leading the country in housing starts in 2024. However, this same migration comes with challenges, such as increased congestion, inflation, and rising home prices, that may impact short-term economic and housing potential. Some high-growth markets risk becoming "victims of their own success," as seen in Austin’s recent softening.
Despite these challenges, we believe in the long-term desirability of many of these Baby Chaser markets due to their strong fundamentals, including job growth, favorable climates, desirable lifestyles, and connectivity. As generational migration patterns continue to evolve, the Baby Chaser Index will remain an essential tool to understand the shifting landscape of the U.S. housing market.
Methodology
This year, Zonda made key updates to the Baby Chaser Index’s methodology. These changes were applied to both the latest and previous years' data, ensuring an accurate apples-to-apples comparison:
- Population cut-off: Reduced to 750,000 (per 2023 U.S. Census data) to include smaller, high-growth markets.
- Age ranges: Adjusted to better align with generational spans, defining millennials as 25 to 44 and baby boomers as 60 to 79. Note that the actual age ranges vary widely by source.
- Data revision: Replaced 2020 data according to U.S. Census Bureau revisions.
Sarah Bonnarens contributed to this article.
For more information or to arrange an interview, contact Steve Ladurantaye at 613-725-7779 or [email protected].
