Austin, Texas, on a spring night. Photo: J Dimas/Flickr
They may not be San Francisco or New York, but there are a number of markets across the US where Millennials can buy that sometimes elusive first home.
The National Association of Realtors (NAR) — which recently polled renters aged 18 to 35 (its definition of a Millennial) and found nearly all would rather own — is now helping them househunt.
The industry group has rounded up what it says are the Best Purchase Markets for Aspiring Millennial Homebuyers, and Austin, Texas, tops it.
“Millennials often want to live in ‘vibrant’ places,” NAR observes, but this city, host to South by Southwest, a popular music, film and tech fest, has more than buzzbands or indie flicks going for it.
Like all cities that made the grade, Austin is a metro area boasting job gains, income levels that can cover the cost of buying (with a 10-percent downpayment), and strong, growing Millennial populations.
Some 18 percent of the metro area’s population is aged 25 to 34, which is higher than the 14-percent average seen across the 100 markets the report checks.
A booming local tech industry — Austin’s known colloquially as Silicon Hills — creates jobs, and employment climbed 4.9 percent in March, compared to a year ago.
On top of that, Austin’s $51,810 median household income overshadows the annual earnings you’ll need to qualify for a mortgage, which it pegs at $43,635.
The list comes at a time when young, would-be buyers face challenging conditions, says Lawrence Yun, NAR’s chief economist.
“Even with potentially higher incomes, prospective millennial homebuyers residing in some of the most expensive cities in the country face the onerous task of paying steep rents while trying to save for an adequate down payment,” says Yun in a statement.
“However, for those currently living in or looking to move to a more affordable part of the country, there are metro areas right now with solid job growth and that offer a smoother path to homeownership,” he continues.
Charleston, South Carolina, placed second partly on the shoulders of its Millennial population, which represents a 16-percent share of the general populous.
Having a $47,905 median income in a market where it takes $41,369 to qualify, doesn’t hurt either.
In third, Denver — one of America’s hottest housing markets — might raise eyebrows, but the association explains. “Though home prices are rising fast, it is still much [more] affordable compared to California, where many new residents are arriving from,” says NAR.
Denver’s median income ($50,923) falls shy of the qualifying income ($56,234), yet 22 percent of Millennials who moved here in 2014 own their own place.
But Millennials should get to know Ogden, Utah, despite its population of about 85,000.
“Ogden is a small metro area which has one of the best combinations of low home prices and a relatively high median household income,” according to NAR.
“In 2014, Millennials who moved recently earned almost twice as much as the qualifying income for first-time homebuyers in the area,” it adds.
Specifically, the median income there is $54,604, which dwarfs the $29,005 you’ll need to show to qualify for an Ogden property.
Whichever of these Millennial-friendly markets young buyers settle on, Yun, NAR’s chief economist, suggests time is on their side — for now.
“As long as new and existing-home supply keeps up to meet demand and holds prices from rising too quickly, these identified areas are poised to lead the way in helping millennials realize their American Dream of becoming a homeowner,” says Yun.