NAR identifies the top 10 markets most affordable for millennials
With better job conditions, an adequate supply of homes, and a strong presence of millennials, these 10 housing markets have the most favorable conditions for millennial homebuyers during the coronavirus pandemic, according to the National Association of Realtors:
- Austin-Round Rock, Texas
- Dallas-Fort Worth-Arlington, Texas
- Des Moines-West Des Moines, Iowa
- Durham-Chapel Hill-Raleigh, N.C.
- Houston-The Woodlands, Texas
- Indianapolis-Carmel-Anderson, Ind.
- Omaha, Nebraska/Council Bluffs, Iowa
- Phoenix-Mesa-Scottsdale, Ariz.
- Portland, Oregon/Vancouver, Wash.
- Salt Lake City, Utah
Millennials, the largest cohort of homebuyers, account for 30% of residents in these areas.
“Nationally, millennials make up the largest share of homebuyers, and these metropolitan areas, in particular, offer great opportunities to realize the dream of homeownership,” said NAR President Vince Malta. “As states and cities begin to reopen, millennials will play a significant role in the housing market’s recovery.”
The Realtors Affordability Distribution Score, a measure of the affordability of current for-sale homes across the US, rose from 34% to 40% year over year. In these top 10 markets, affordability grew more this year than it did nationwide. In Dallas, for example, a household earning $100,00 can afford to purchase 56% of homes currently listed for sale, compared to 45% a year ago.
“Record-low mortgage rates have improved housing affordability, bringing more buyers into the market, and multiple offers for starter homes could become common in these metro areas,” NAR Chief Economist Lawrence Yun said.
A relatively better employment condition was also partly the reason why these markets were more affordable, according to Yun. While the largest 100 metros areas saw an average 13% year-over-year decline in employment in April, Dallas, Houston, Salt Lake City, and Phoenix experienced an 8% drop from the previous year.
On average, the top 10 markets had a smaller share of workers in industries most affected by the COVID-19 economic shutdown. For example, 15% and 17% of employees in Durham and Des Moines work in industries hard-hit by coronavirus, compared to the 21% average for the biggest 100 metros.
A better-than-average inventory also gave the top 10 markets an edge in affordability. According to Realtor.com, the figure for active listings in Des Moines and Omaha in April edged up by 5% and 1%. In contrast, inventory plummeted by 18% on average in the largest 100 metropolitan areas.