Millennial buyer cohort finding success in smaller Midwestern housing markets where prices are lower
With affordability challenges greater in large metropolitan areas, millennials are turning to rural, more affordable areas for homebuying – and even in these less pricy markets, brokers see Millennial buyers as more cautious and well-informed.
Apartment List issued its 2025 millennial homeownership report on May 20. The study focuses on adults aged 29-44 and notes that millennials are the third consecutive generation to purchase homes more slowly than the preceding generation.
By the age of 30, just 33% of millennials were homeowners, compared to 42% of Generation X, 48% of Baby Boomers, and 55% of the Silents.
Mark Worthington (pictured top) is a branch manager at Churchill Mortgage. He has spent 26 years as a mortgage loan officer, and said he was not surprised to see millennials buying houses at a slower rate than previous generations.
“I am seeing millennial buyers being extremely cautious,” Worthington told Mortgage Professional America. “They ask a lot of questions and want to see information backed up with facts. They often want to start the process without a great deal of personal contact and work through electronic means of communication.
“The key is to provide enough information to encourage the personal contact to build a trust relationship. If you don’t build a trust relationship, they will move on to another lender who does."
Finding pockets of affordability
Affordability is a challenge for all homebuyers right now. Interest rates remain elevated thanks to market turmoil caused by tariffs. The Federal Reserve is holding off on additional rate cuts for now as they see how market turmoil might affect inflation.
Worthington notes that in addition to market challenges, millennials have monthly bills that previous generations did not have at the same age.
“Often the challenges center on affordability,” he said. “The millennial buyer has more ongoing monthly expenses than previous generations. Thirty years ago, most people didn’t have a cell phone, streaming services, delivery services and coffee shop memberships. All these eat into the affordability of housing.”
The Apartment List report notes that millennials are catching up to Gen X, as both generations were delayed in homeownership by the 2008 housing crisis. Still, into their late 30s, millennial homeownership trails Gen X in 48 states, with only Indiana, Iowa, and the District of Columbia as places where Millennials have the edge.
In addition, millennials are fleeing the large cities for smaller, more rural homes. The report states that Millennial homeownership is 52% in non-metropolitan parts of the country, but only 35% in the nation’s largest urban markets.
The top cities for Millennial homeownership reflect those statistics. Grand Rapids, Michigan, has the highest percentage at just over 60%. The rest of the top 10 includes Minneapolis, St. Louis, Raleigh, Indianapolis, Cincinnati, Pittsburgh, Louisville, Kansas City, and Birmingham, Alabama.
Meanwhile, the bottom 10 metro markets include six California markets: Los Angeles, San Jose, San Diego, San Francisco, Riverside, and Fresno. The other four are Honolulu, New York City, Miami, and Las Vegas.
Reaching them with technology
Millennials have grown up with the modern technology currently available in the mortgage market. Samantha Shelton, mortgage broker, president, and founder of Align Lending, said brokers must be prepared to reach these customers using the latest technology.
“We have to think about the generation that's buying right now,” Shelton told Mortgage Professional America. “My biggest generation is the millennial buyers right now. And I'm going to be honest, they don't really want to talk to me on the phone very often. They want to send a text message and know that I'm available. And they were like, ‘Is there a messaging system? Is there a way that you can text this link to me?’”
While some customers want her to go through each line of a loan estimate to discuss what everything means, younger customers are opting for summaries and quick conversations.
“What does the client want?” she said. “I have some that are like, ‘Can you just send me a synopsis of what this means? Please text it to me.’ So, [it’s] just being aware of what type of client you have.”
This means it is important for brokers to have the technology that younger buyers want and to understand how to reach them during the mortgage process.
Despite the rise of AI tools from companies like UWM and Rocket, Bruce Gehrke of JD Power emphasizes that younger, digitally native borrowers are often seeking personal interaction when AI falls short.https://t.co/hBRxiJYl3o
— Mortgage Professional America Magazine (@MPAMagazineUS) May 24, 2025
“You don't have those systems in place, or the correct software to provide that to them, it's going to make the process hard for them,” Shelton said. “The point is, retaining your client, not losing them. It is really meeting them where they are.”
Stay updated with the freshest mortgage news. Get exclusive interviews, breaking news, and industry events in your inbox, and always be the first to know by subscribing to our FREE daily newsletter.
