Where are millennials living?
More of them are Buying homes instead of paying rent.
So many people are moving to Denver nowadays; especially Millennials. It used to be that Millennials could only afford to rent, but times have changed and buying is now the preferable option. Young adults in Denver own homes at a higher rate than their peers in the rest of the country — 34.2% versus 32.1%, according to a study from Abodo.
Among the 45 largest metro areas, Denver ranked 15th for the most Millennial homeowners.
After trending downward over the past decade, the homeownership rate among young adults in Denver appears to have hit a bottom in 2014 at 32.8%. In 2006, before the housing bust, 43.8% of adults ages 18-35 lived in homes or condos they owned.
“The greatest barrier for Millennials owning homes in Denver now compared to those in past decades is the fact there are very few condos and homes available under $300,000,” said Kelly Hepburn, an agent with Colorado Craft Brokers who helped Watkins and Dolge find their new home.
The average home a Millennial is purchasing in Denver costs $291,299, below the overall market average in June, $498,762.
“Millennials are aging into homeownership, the labor market is booming and wages are growing — these three factors are driving demand. However, the factors keeping inventory low are more complicated,” Svenja Gudellt, chief economist at Zillow, a real estate portal, said in a research blog.
In popular places such as Denver and Seattle, where young adults are moving to in large numbers, builders have targeted apartments more than new homes, and that is pushing up home prices much faster than incomes.
At 8.2%, metro Denver home prices in April appreciated at the fourth-fastest annual pace in the country after Seattle, Washington, Portland, Oregon, and Dallas, Texas.
Jobs have become more plentiful than they were six or seven years ago, and Denver has the lowest unemployment rate of any major metro at 2.3% in May.
Earlier this year, Abodo released a report stating that Millennials in metro Denver were more likely to be employed and less likely to live with family than Millennials in other cities. But they also struggle with home prices much higher than in the cities where Millennials are making the greatest strides in buying homes.
Nationally, 63% of adults own a home, and Denver is at 62.9%, according to the new Abodo study. For Millennials, the city ranked No. 63 overall out of 135 cities the company studied.
“These numbers in Denver fall in the middle of the pack for homeownership by Millennials, when compared to the rest of the country,” said Sam Radbil, a spokesman for the online apartment matching service based in Madison, WI.
The cities where Millennials own homes at the highest rates include Ogden, Utah, at 51%; Grand Rapids, Michigan, at 45.3%; and Des Moines, Iowa, at 43.6%.
At the other extreme, fewer than one in five young adults owns a home in Los Angeles, Honolulu, San Diego and New York — metros with some of the most expensive housing in the country.
Now that you know how Denver ranks keep that in mind when you are looking for your dream home in your dream city!