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LendingTree Ranks Most Popular Cities for Millennial Homebuyers

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While millennials are often stereotyped as adolescents, the reality is that this generation is well into adulthood — with most between their early 20s and mid-30s. This means that many of them are actively pursuing careers, having children and buying homes.

To determine where millennials are buying homes, LendingTree, the nation’s leading online loan marketplace, analyzed new purchase mortgage requests made on our website between Jan. 1, 2018 and Nov. 25, 2018. Since there is not an official age range for the generation, we defined a millennial as someone under the age of 35. The data does not include home refinance.

We found that nearly one-fourth of all mortgage purchase requests in this period came from millennials. We also found that millennials in Salt Lake City, Minneapolis and Pittsburgh were more likely to be pursuing homeownership than any of the nation’s other 50 largest metropolitan areas.

Key findings

  • Salt Lake City, Minneapolis and Pittsburgh are the metros where millennials are making up the largest percentage of purchase requests. In Salt Lake City, a majority of the total purchase requests in the area, 51%, come from millennials. In Minneapolis and Pittsburgh, that number is 48%.
  • In Tampa, Fla., Las Vegas and Miami, millennials are making the least purchase requests. Only 30% of purchase requests came from people under 35 in Tampa. That number was only slightly higher in Las Vegas and Miami, where 31% and 32% of purchase requests came from those under 35.
  • San Francisco, San Jose, Calif. and New York are where millennials wait the longest to buy homes. The average age for these three areas was 29.6 years old. This compares with an average of 28.7 years old across the remaining 47 largest metros in the U.S.
  • Salt Lake City, Louisville, Ky. and Cincinnati are the metros with the lowest average age of buyers under 35. In each of these areas, the average age for potential millennial homebuyers is around 28 years old. In Louisville, Ky., and Cincinnati, the average requested down payment for a home was lower than the national average, meaning that buyers likely needed to spend less time saving to buy a home. Although the average down payment amount in Salt Lake City is slightly higher than the national figure, the average age of the total population in the area is among the lowest in the country. This likely contributes to the low average age for potential millennial homebuyers.
  • San Jose, Calif., San Francisco and New York are the places where millennials had the highest average credit scores. In each of these areas, the average millennial homebuyer had a credit score higher than 704. By comparison, the average credit score for millennial homebuyers across the 50 largest MSAs in the country was 656.
  • Memphis, Tenn., Birmingham, Ala. and New Orleans are where millennials had the lowest average credit scores. Credit scores in these three areas were 622, 629 and 634 respectively. These lower scores suggest that these cities might be attractive to some millennials who have limited credit history and/or poor credit.

Most popular cities among millennial homebuyers

Salt Lake City
Share of Purchase Mortgage Requests Coming from Millennials: 51%
Average Requested Loan Amount: $234,391

Minneapolis
Share of Purchase Mortgage Requests Coming from Millennials: 48%
Average Requested Loan Amount: $200,930

Pittsburgh
Share of Purchase Mortgage Requests Coming from Millennials: 48%
Average Requested Loan Amount: $128,316

Least popular cities among millennial homebuyers

Tampa, Fla.
Share of Purchase Mortgage Requests Coming from Millennials: 30%
Average Requested Loan Amount: $174,301

Las Vegas
Share of Purchase Mortgage Requests Coming from Millennials: 31%
Average Requested Loan Amount: $224,736

Miami
Share of Purchase Mortgage Requests Coming from Millennials: 32%
Average Requested Loan Amount: $225,536

What should millennial buyers do?

The biggest challenges for millennial homebuyers are having enough money for a down payment and a good credit history. Potential buyers should educate themselves on how to improve their credit scores and create a savings plan to raise the down payment.

From a housing market perspective, tight inventory is boosting prices in many markets and millennial homebuyers must now contend with rising mortgage interest rates reducing their buying power. As affordability declines, borrowers should consider all the programs available to assist them in becoming homeowners, such as FHA loans.

Methodology

LendingTree analyzed mortgage requests and offers for borrowers ages 35 years and under between Jan. 1, 2018 and Nov. 25, 2018, along with requests from the total population of mortgage-seekers based on the location of the property to be mortgaged. The city rankings are generated from the percentage of total purchase mortgage requests received by LendingTree from borrowers in the millennial generation.

The latest breakdown of cities that make up an MSA can be found here: https://www.whitehouse.gov/wp-content/uploads/2018/04/OMB-BULLETIN-NO.-18-03-Final.pdf

 

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