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The homeownership rate among Millennials has dropped from 40 percent in 2006 to 32 percent in 2015, according to data released by the US Census Bureau. However, the decline in homeownership for this demographic is not uniform across the US. Some US cities are still seeing a high percentage of Millennial homeowners, says the financial data site SmartAsset.
In a recent study, SmartAsset found that Millennial homeownership is “quite high” in some cities despite the overall decrease in the percentage of Millennial homeowners. In some cities it can be as high as nearly 60 percent. Cities were scored out of 100, with a score of 100 reflecting a high level of Millennial homeownership.
The Northeast has some of the lowest levels of homeownership among Millennials, according to SmartAsset, which singled out New Haven, CT, where only 5 percent of Millennials own their own homes. Only one city in the Northeast — Springfield, MA — even made the Smart Asset list top 25 cities where Millennials are buying.
At the top of the list was Sioux Falls, SD, which had a score of 100. Here Millennial homeownership rose from 40.4 percent in 2006 to 45 percent in 2015. Sioux Falls is a particularly attractive location having been named one of the “best places for children.” It also ranks high on education, an obvious plus for would-be parents.
Although nearly 61 percent of Millennials own their own home in Elk Grove, CA, it ranked second with a score of 99.73. Elk Grove was a small farming city until around the year 2000, and now it attracts more residents thanks in part to its affordability and proximity to jobs in Sacramento and San Francisco.
Bakersfield, CA ranked third with a 40.3 percent Millennial homeownership rate in 2015, which was up from the 35.2 percent recorded in 2006. Bakersfield is similar to the other Sacramento satellite city on the list, Elk Grove, because it likely benefits from Sacramento’s strong STEM job market.
The other cities that made the top 10 include Roseville, CA, Peoria, IL, Cary, NC, Fort Wayne, IN, Chattanooga, TN, Anchorage, AK and Omaha, NE.
In order to determine where in the US more Millennials are buying, SmartAsset looked at the homeownership rates in households where the the head of the household was less than 35 years old, and then gathered data on the percentage of those households who owned their homes in 2006 and in 2015 in 200 of the largest US cities.
It then ranked the 200 cities according to the under-35 homeownership rate in 2015, and the change in the under-35 homeownership rate between 2006 and 2015. The rankings were averaged, giving “equal weight to both factors” and a score was assigned based on the final average ranking.
Home prices that are rising faster than wages in many parts of the country is a major contributing factor to the inability of many Millennials to purchase a home. On top of struggling to pay off student debt, Millennials can’t save enough money for a down payment on a house while continuing to face rising rent prices.
Click here to read the entire report.