In a new study, the National Association of Realtors (NAR) [1]identified the best markets for millennials during COVID-19.
Their analysis found that the following cities were the best for millennial homebuyers:
- Austin-Round Rock, Texas
- Dallas-Fort Worth-Arlington, Texas
- Des Moines-West Des Moines, Iowa
- Durham-Chapel Hill-Raleigh, North Carolina
- Houston-The Woodlands, Texas
- Indianapolis-Carmel-Anderson, Indiana
- Omaha, Nebraska/Council Bluffs, Iowa
- Phoenix-Mesa-Scottsdale, Arizona
- Portland, Oregon/Vancouver, Washington
- Salt Lake City, Utah
“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,” said NAR’s Chief Economist Lawrence Yun. “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.”
The NAR states that the typical household can afford to buy 40% of the homes currently listed for sales, which is an increase from last year’s 34%. However, in the 10 markets listed by the NAR, affordability increased more than it did nationwide. A household earning $100,000 in Dallas can afford to buy 56% of homes listed compared to 45% last year.
According to April 2020 employment data, employment fell by an average of nearly 13% in the largest 100 metro areas compared to last year. However, employment in Dallas, Houston, Salt Lake City, and Phoenix fell 8% from the year earlier.
Another factor present in these markets is improved inventory and availability. The number of active listings in Des Moines and Omaha in April increased by 5% and 1%, respectively. Inventory, though, declined 18% on average in the largest 100 metros.
Also, three in 10 residents in these markets are millennials.
“Nationally, millennials make up the largest share of homebuyers and these metropolitan areas, in particular, offer great opportunities to realize the dream of homeownership,” said NAR President Vince Malta, broker at Malta & Co., Inc., in San Francisco, CA. “As states and cities begin to reopen, millennials will play a significant role in the housing market’s recovery.”