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Most Popular Metros for Millennial Homebuyers

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Millennials make up the largest group of homebuyers in the U.S., ahead of older (and richer) Gen Xers and baby boomers. And while the COVID-19 pandemic has doubtlessly put some millennials’ homebuying plans on the back burner, plenty are still actively engaging in the housing market.

But where are millennials looking to buy? To answer, LendingTree analyzed mortgage offers given to millennial users of the LendingTree platform across the nation’s 50 largest metros from Jan. 1 through Dec. 31, 2021.

What we found was that millennials (people ages 25 to 40 in 2021) make up a majority of homebuyers in most of the country’s largest metros, including Denver, Seattle and Boston.

Key findings

  • Denver, Seattle and Boston are the metros where millennials make up the largest share of homebuyers. In Denver, 63.63% of mortgages were offered to millennials. In Seattle and Boston, the percentages were 61.35% and 61.08%, respectively.
  • Miami, Jacksonville, Fla., and Tampa, Fla., have the lowest percentages of millennial buyers. Across these three Florida metros, an average of only 46.54% of mortgages were offered to millennials. Given that the Sunshine State is known as a popular hub for retirees, it’s understandable why millennials may not be as abundant there as in other parts of the country.
  • Millennial homebuyers in San Francisco, New York and San Jose, Calif., are the oldest in our study. The average age for these three areas was 33.51 years old, nearly two years older than the average of 31.79 in the metros with the youngest millennials — Indianapolis, Salt Lake City and Phoenix. Since metros like San Francisco and New York are so expensive, millennials often need to spend more time saving before they’re ready to buy a house.
  • San Francisco, San Jose, Calif., and San Diego are the metros where millennial homebuyers have the highest average credit scores. The average credit score for these three areas was 733. In comparison, the average credit score for millennial homebuyers in the metros where millennials had the lowest credit scores — Memphis, Tenn., Birmingham, Ala., and Virginia Beach, Va. — was 702.
  • Expensive metros, including San Jose, Calif., San Francisco and Seattle, were the areas that required millennials to put down the largest down payments on their homes. The average down payment across these three areas was $104,896. That figure is more than three times higher than the average down payment of $30,551 across St. Louis, Memphis, Tenn., and Oklahoma City — the metros where down payments were the smallest.

Most popular metros for millennial homebuyers

No. 1: Denver

  • Share of mortgages offered to millennials: 63.63%
  • Average millennial age: 32.09
  • Average credit score among millennials: 723
  • Average down payment amount among millennials: $53,750

No. 2: Seattle

  • Share of mortgages offered to millennials: 61.35%
  • Average millennial age: 32.87
  • Average credit score among millennials: 725
  • Average down payment amount among millennials: $85,677

No. 3: Boston

  • Share of mortgages offered to millennials: 61.08%
  • Average millennial age: 32.73
  • Average credit score among millennials: 728
  • Average down payment amount among millennials: $59,599

 

Least popular metros for millennial homebuyers

No. 1: Miami

  • Share of mortgages offered to millennials: 46.01%
  • Average millennial age: 32.95
  • Average credit score among millennials: 718
  • Average down payment amount among millennials: $49,303

No. 2: Jacksonville, Fla.

  • Share of mortgages offered to millennials: 46.74%
  • Average millennial age: 32.64
  • Average millennial credit score among millennials: 712
  • Average down payment amount among millennials: $34,475

No. 3: Tampa, Fla.

  • Share of mortgages offered to millennials: 46.88%
  • Average millennial age: 32.50
  • Average credit score among millennials: 712
  • Average down payment amount among millennials: $38,754

 

Tips for millennial homebuyers

With home prices still scorching hot and mortgage rates rapidly rising, navigating today’s housing market can be challenging. This can be especially true for millennials, many of whom may not have much experience in the housing market.

Fortunately, some tips can help make the homebuying process more manageable for millennials:

  • Work on your credit score. A solid credit history and higher credit score show lenders you know how to manage debt. As a result, the better your credit score, the more likely you’ll be to find a lender willing to work with you and offer you a low rate. Work on improving your credit score by making on-time payments and keeping your spending in check.
  • Pay down your monthly debts. Another factor lenders look at is your debt-to-income (DTI) ratio — the percentage of your gross monthly income that goes toward recurring debts. Maximum DTI ratios vary by loan program, so it’s a good idea to keep your total DTI ratio (which includes your monthly mortgage and all debt payments) at 36% or less.
  • Know your loan options. It can be a challenge to build credit quickly or come up with a significant down payment. But don’t stress — specific first-time homebuyer programs are designed to make homeownership more affordable. For example, borrowers with a credit score as low as 580 and a down payment of only 3.5% may qualify for a Federal Housing Administration (FHA) loan.

Methodology

To conduct this study, LendingTree analyzed nearly 480,000 mortgage offers given to millennial borrowers across the nation’s 50 largest metropolitan areas from Jan. 1, 2021 through Dec. 31, 2021. Specifically, LendingTree analyzed offers for four types of 30-year, fixed-rate mortgage loans: conforming, jumbo, U.S. Department of Veterans Affairs (VA) and FHA.

The age range for millennials used in this study is from the Pew Research Center, which defines millennials as anyone born from 1981 through 1996. Because this study looks at 2021 data, that means our study focuses on individuals ages 25 to 40.

The metro rankings were generated by looking at the share of mortgages offered to millennials as a percentage of the total number of mortgages offered to those ages 18 to 80 in a given area. The larger the share of offers given to millennials, the higher ranking a metro received.

 

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