Photo: Tim Sackton/Flickr
The US housing market will remain highly competitive and challenging in 2019 for budget-conscious Millennial buyers, but a handful of markets will offer a glimmer of hope, according to a recent report by Realtor.com.
“These markets are Millennial magnets with bustling economies, affordable housing for today’s standards, and an overall high quality of life,” says Danielle Hale, Realtor.com’s chief economist, in a statement.
To find the best Millennial markets, Realtor.com compared home prices, available inventory, and how quickly homes sold throughout multiple housing markets across the country.
Despite being located in different regions of the country, Realtor.com determined that the markets all shared several notable characteristics, including strong job growth, high levels of new construction and a growing Millennial population.
With a median home price of $161,757, roughly $100,000 below the national median value ($260,290), Lakeland, FL claimed the top spot on the list.
The area is ideal for young families who want “the benefits of a strong job market and nightlife of a city, but still want space for kids to play.” The typical three-bedroom home in Lakeland sells for under $200,000.
Grand Rapids, MI landed in second, with a median home value of $187,319 — making it nearly $75,000 more affordable than the current national median price. Homes sell in an average of 52 days, and the greater Grand Rapids area offers highly rated schools.
In third place was El Paso, TX, where homes sold for a median price of $148,643.
El Paso stood out from the other top markets on the list because it had the most affordable forecasted home price — roughly $110,000 cheaper than the national median home value. A year-round temperate climate earned El Paso bonus points.
Rounding out the top 5 were Chattanooga, TN and Phoenix, AZ.
Other markets that made the top 10 were Bridgeport, CT, Las Vegas, NV, Boise City, ID, Miami, FL, and Boston MA.
Meantime, the Millennial population in each of these markets is growing. On average, Millennials took out nearly half of all mortgages in these areas in 2018.
Home prices in these markets are all expected to see higher growth in 2019 than the national average, which Realtor.com says will help young buyers “build some much-needed equity.”
But with interest rates expected to climb to nearly 6 percent by the year’s end and starter-home inventory consistently falling, first-time homebuyers should be prepared to face a challenging market in 2019.
“No matter where you live in the country, finding an affordable entry-level home is going to be difficult this year, but 2019’s top 10 markets might offer a slight advantage,” says Hale.
And, for those thinking of buying, Hale adds that increasing inventory will mean more options to choose from when shopping and lower sentiment means less competition, which also might help create opportunities to get into the housing market.
“The biggest challenge for buyers in the 2019 housing market will be finding a home that meets all of their needs, some of their wants, and still falls within their budget,” Hale tells Livabl.