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Housing Trends: Millennials and Migration

Nearly 72 million people living and working in the U.S. today are part of what’s commonly referred to as the Millennial generation, which currently represents the most significant cohort of the country’s demographics. Additionally, given their outsized role within the nation’s economy and influence on everything from culture to the social and political spheres, CommercialCafe has made an effort to track their movements and preferences throughout the years.

Prior to the onset of the COVID-19 pandemic, a study was conducted to determine the top 10 most attractive metropolitan statistical areas (MSAs) for Millennials across the U.S. Now, two years later, there have been some major shake-ups in the ranking —from the meteoric rise of San Jose, California, to significant drops for Raleigh, North Carolina, and Denver— along with new entries making their way onto the list.

In revisiting the previous assessment, CommercialCafe followed each entry’s performance across these seven indicators:

  • Millennial population growth between 2016 and 2020
  • Proportion of Millennials in the overall population in 2020
  • Regional price parity
  • Median Millennial household earnings
  • Unemployment rate
  • Percentage of Millennials with employer-based health insurance
  • Percentage of Millennials in the labor force, with a bachelor’s degree

Key Findings:

West Coast Metro Areas Hungry for Talent — & Ready to Pay For it

While all of the locations on this list are exceptional in their abilities to attract Millennials, performances vary significantly across most metrics. That said, here’s a quick overview of the leading metros for individual indicators.

One of the first findings that stood out in the study was that the top position for each individual indicator was no longer evenly distributed, with the San Jose, California metro occupying three of the leading spots. In fact, San Jose witnessed the most spectacular shift in the ranking, going from 10th place right up to the head of the list by earning a total of 77.8 out of 100 points. Most notably, the California metro area boasted the highest median earnings for Millennial households. It was followed by another West Coast MSA (San Francisco), as well as Boston and Seattle.

However, the largest change in the overall Millennial population was recorded in the Seattle metro, where the number of residents within that age group jumped by 13.7%. In raw numbers, that meant that an additional 80,000 Millennials chose to make this Washington metro area their home between 2016 and 2020 —bringing the total for that age group to roughly 668,000.

Meanwhile, according to the latest data from the U.S. Census Bureau, 17.4% of residents in the Austin metro residents were part of the Millennial cohort, which landed the Texas MSA in the top spot for its share of Millennials within its total population. And, even with all but two of its seven metrics below the ranking average, Austin still managed to maintain its runner-up position in the top 10.

Next, the San Francisco metro landed in fifth place, gaining notable points for its second-highest median Millennial household earnings. Educational attainment and healthcare coverage levels for Millennials were also within the top three for this California metro area.

Finally, despite previously ranking first among the top metro areas for Millennials, the Denver metro had to settle for sixth place this time round. This MSA’s top performances across its demographic metrics — second place for the largest growth in its Millennial population and third place for the highest percentage of Millennials within the total population — were insufficient to garner it enough points to break into the top three.

Moreover, according to Bureau of Labor Statistics (BLS) numbers for March 2022, unemployment in the San Jose metro area stood at 2.5%. Although that was only the third-lowest rate among the 10 entries, it nevertheless proved useful in offsetting some of the region’s more modest performances across other indicators, such as regional price parity (ninth place) and its Millennial demographics.

Specifically, between 2016 and 2020, the Millennial population in the Austin metro area increased by 12.8% — the third-largest such increase within the ranking. Going by the numbers, that meant an additional 43,000 new residents within that age group chose to live and work in this Texas metro area. Plus, according to a previous CommercialCafe study, the Austin metro area has been especially successful in attracting new residents from in-state rivals Houston, Dallas Fort-Worth and San Antonio.

Furthermore, despite significant rent increases throughout the last couple of years and median Millennial household incomes below the $100,000 threshold, the region’s cost of living remains competitive when compared to other large MSAs: Austin finished in fifth place, outranking Denver, Boston, Seattle, San Jose and San Francisco.

As mentioned, Seattle performed exceptionally well in terms of its increasing number of Millennials, landing in first place for this indicator. But, it’s also important to note that the region also had the second-highest share of Millennials within the overall population in rankings at 17%.

With median Millennial household incomes around $101,000, the Seattle metro landed in fourth place for this metric. It also received additional points for ranking fourth for its share of health insurance coverage among people between the ages of 25 and 34 (72.5%, just below San Francisco).

Clearly, the Seattle metro area has a lot going for it, such as its willingness to invest in parks and green spaces; its dedication to creating an exciting environment for innovation and startups; and more. But, for those considering a move to Seattle, the cost of living might be a complicating factor. That’s because the MSA had the third-worst regional price parity in our ranking, outpriced by only the two Bay Area entries (San Jose and San Francisco).

Salt Lake metro settled in fourth place, pulling ahead of San Francisco after it outranked the California MSA on several metrics. For instance, the Utah metro boasts a larger share of Millennials with employer-based health insurance amid its residents than San Francisco —73.8%, enough to earn it second place.

Salt Lake also performed better than the northern California metro area for its share of Millennial residents within the overall population. According to most recent estimates, some 16.4% of people living in Salt Lake City metro were Millennials (fourth place).

Most notably, the Utah metro earned the top spot for the lowest unemployment among the ten entries. Its 2.1% rate —recorded as of March 2022— is mirrored at the other end by Denver and Columbus’ 3.3% unemployment.

Few places exhibit such a clear division in their evolution before and after the internet and tech boom as San Francisco. Once the home of counterculture and independent artists, it’s now become one of the most exciting destinations for tech professionals. And, with median yearly incomes for Millennials households of approximately $133,778, it’s also the second-best performing metro area in our ranking for this indicator.

The Denver metropolitan area repeated its performances in terms of its Millennial demographics: Once again, it recorded the second-largest gain in residents from this age group (12.8%), bringing the share of Millennials within the MSA’s total population to 16.9% for third place.

However, Denver picked up far fewer points across the remaining indicators this time, with its unemployment rate being its greatest liability. At 3.6%, it was the highest rate of unemployment registered within the ranked metro areas.

Residents here have also felt the squeeze from an increase in consumer prices, as demonstrated by the declining performance of Denver’s regional price parity. According to the Consumer Price Index for Denver-Aurora-Lakewood, the most significant price hikes occurred in used car, gasoline and energy transactions.

For more details and information about the analysis, including charts and methodology, click here.

About Author: Demetria Lester

Demetria C. Lester is a reporter for DS News and MReport magazines with more than eight years of writing experience. She has served as content coordinator and copy editor for the Los Angeles Daily News and the Orange County Register, in addition to 11 other Southern California publications. A former editor-in-chief at Northlake College and staff writer at her alma mater, the University of Texas at Arlington, she has covered events such as the Byron Nelson and Pac-12 Conferences, progressing into her freelance work with the Dallas Wings and D Magazine. Currently located in Dallas, Texas, Lester is an avid jazz lover and likes to read. She can be reached at [email protected].

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