At long last, Millennials (age 18 – 35) are buying homes in record numbers. A study recently released by Lending Tree [1], an online mortgage market place, reveals that this trend is increasing and demand for homes from this generation seems to be greater in certain cities across the nation.
"Thanks to a stronger jobs market and overall economy, the 35-and-under crowd is growing up," said Doug Lebda, CEO of LendingTree. "Although Millennials have been slow to the real estate market, the appeal of homeownership remains strong, and we're beginning to see more activity with this generation. Rising home prices and high student loan debt are still affecting the purchase power of Millennials, but as more student debt is repaid and the jobs market improves, we're likely going to see more young buyers in this spring home buying season than in previous years."
On average, 36.1 percent of all mortgage requests through LendingTree between August 1, 2016, and February 1, 2017, came from consumers 35 years and younger. This is a slight increase from the same period last year, where 34.24 percent of loan requests came from millennials. The average loan amount requested from this age group is $175,180, compared to an average of $191,157 for those over 35.
Millennials in Pittsburgh, Washington D.C., and Des Moines, are pursuing home ownership more than their counterparts in any of the nation's 100 largest cities, the Lending Tree study showed.
LendingTree analyzed mortgage requests and offers for borrowers aged 35 years and under between August 1, 2016, and February 1, 2017, along with requests from the total population of mortgage-seekers based on the location of the property to be mortgaged. The city rankings were generated from the percentage of total purchase mortgage requests received by LendingTree from borrowers in the millennial generation.
Pittsburgh, Pennsylvania, tops the list with 48.4 percent of all purchase mortgage requests coming from Millennials, followed by Washington, D.C. (46.8 percent) and Des Moines, Iowa (46.4 percent). The average loan amount requested by young borrowers in those cities is $201,921, $381,110, and $173,439, respectively.
While San Francisco Millennials once again signed on for the highest average mortgage loan amount in the country ($528,761), the city also sees a relatively large percent of home loan requests coming from Millennials (44.3 percent), underscoring the fact that San Francisco is home to both an abundance of top-earning young professionals and extremely high housing costs.
Millennials in Ohio are seeking the most affordable mortgages, with Toledo, Akron, Lakewood, and Dayton claiming four of the top ten cities with the lowest average mortgage amounts for the age group. On the other hand, California is host to four of the ten cities with the highest average mortgage amount: San Francisco, San Jose, Los Angeles, and San Diego.