Where are all the first-time homebuyers? In their cozy rentals, that’s where!
With a market almost completely devoid of newby buyers, and the rental market being as competitive as it is (just ask my friend looking for a single-family home in East Dallas!), and prices going up across all segments, it’s just hard to find a place to put your leather couch and Le Creuset stock pot. Millennials hold a lot of potential when it comes to real estate purchases, but where can the find the best value? Is it San Antonio and Houston?
Well, according to the National Association of Realtors, factors such as job creation and population trends position Austin and Dallas as great places for Millennial homebuyers. It will be a while before this generation gets off the fence and into a mortgage, but when they do, NAR says they will be buying in the Midwest and West more likely than not.
“Millennials will eventually settle down, trade their roommates for spouses and want to raise a family,” said NAR President Steve Brown of Irongate Realtors. “As long as median income continues to support purchasing power in most areas, the demand and opportunity will be there for Millennials to purchase their first home with guidance and insights from a Realtor.”
But NAR chief economist Lawrence Yun says that homeownership rates for adults under 35 peaked in 2005 at 43 percent and is now at just 36 percent of the market.
“Limited job prospects, student debt, and flat wage growth have combined with tight credit conditions and low inventory to price Millennials out of some of the top cities such as New York and San Francisco,” he said. “However, NAR research finds that there are other metro areas Millennials are moving to where job growth is strong and homeownership is more attainable. These markets are well-positioned to soon experience a rise in first-time buyers as the economy improves.”
Over the 100 metro areas with a substantial Millennial presence that NAR analyzed, these were the best markets for first-time Millennial homebuyers:
So while Trulia says that San Antonio and Houston appear to be hot markets for Millennials, the best values when it comes to jobs and wages can actually be found in Austin and Dallas. What do you think?