The National Association of Realtors (NAR) has identified the top 10 most favorable U.S. markets for millennial home buyers amid the coronavirus pandemic.
By analyzing current housing affordability, local job market conditions during the crisis, the share of millennials in the area, and inventory availability in the largest 100 metropolitan statistical areas, the association listed the following markets in alphabetical order:
- Austin-Round Rock, Texas
- Dallas-Fort Worth-Arlington, Texas
- Des Moines-West Des Moines, Iowa
- Durham-Chapel Hill-Raleigh, N.C.
- Houston-The Woodlands, Texas
- Indianapolis-Carmel-Anderson, Ind.
- Omaha, Neb./Council Bluffs, Iowa
- Phoenix-Mesa-Scottsdale, Ariz.
- Portland, Ore./Vancouver, Wash.
- Salt Lake City, Utah
“Nationally, millennials make up the largest share of home buyers, and these metropolitan areas, in particular, offer great opportunities to realize the dream of homeownership,” says Vince Malta, NAR president and broker at San Francisco-based Malta & Co. “As states and cities begin to reopen, millennials will play a significant role in the housing market’s recovery.”
Roughly three in 10 residents, or 30%, in these markets are millennials, according to the NAR. With such high numbers in the demographic, these 10 cities can expect many of their millennial residents to become homeowners.
Currently, the typical U.S. household can afford to buy 40% of the homes listed for sale now, compared with 34% a year earlier, according to the Realtors Affordability Distribution Score, a collaboration between the NAR and realtor.com. In the 10 listed markets, affordability increased more this year than it did nationwide. For example, a household earning $100,000 in Dallas can afford to buy 56% of homes currently listed for sale, compared with 45% last year.
“Record-low mortgage rates have improved housing affordability, bringing more buyers into the market, and multiple offers for starter homes could become common in these metro areas,” says Lawrence Yun, NAR’s chief economist. “With relatively better employment conditions and a strong presence of millennials in these markets, more new home construction will be required to fully satisfy the housing demand as the economy reopens.”
Data from April suggests employment decreases in some of the markets are better than the 13% average decline in the largest 100 metro areas compared with last year. In Dallas, Houston, Salt Lake City, and Phoenix, employment dropped only 8% from a year earlier.
In addition, the above markets had a smaller share of workers, on average, in industries most affected by the pandemic-induced lockdowns. In Durham and Des Moines, only 15% and 17% of employees, respectively, work in high-risk industries, while the average for the largest 100 metro areas is 21%.
Last, the top 10 have better-than-average inventory availability. For Des Moines and Omaha, the number of active listings in April increased by 5% and 1%, respectively, according to realtor.com, when inventory declined an average of 18% in the largest 100 metro areas.
