The National Association of Realtors identified 10 markets with favorable conditions for millennial homebuyers during the coronavirus pandemic. In alphabetical order, the markets are:
Austin-Round Rock, Texas
Dallas-Fort Worth-Arlington, Texas
Des Moines-West Des Moines, Iowa
Durham-Chapel Hill-Raleigh, North Carolina
Houston-The Woodlands, Texas
Omaha, Nebraska/Council Bluffs, Iowa
Portland, Oregon/Vancouver, Washington
Salt Lake City, Utah
“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,” said NAR’s Chief Economist Lawrence Yun in a NAR news release. “With relatively better employment conditions and a strong presence of millennials in these markets, more new home construction will be required to fully satisfy the housing demand as the economy reopens.”
Top 10 Metro Areas
NAR identified the top 10 metro areas for millennial homebuyers by analyzing current housing affordability, local job market conditions during the coronavirus pandemic, the share of millennials in the area, and inventory availability in the largest 100 metropolitan statistical areas across the country.
“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, a broker at Malta & Co., Inc., in San Francisco, in the news release. “As states and cities begin to reopen, millennials will play a significant role in the housing market’s recovery.”
Nationwide, the typical household can afford to buy 40% of the homes currently listed for sale compared to 34% a year earlier, according to the Realtors Affordability Distribution Score, a collaboration between the National Association of Realtors and realtor.com. The score measures the affordability of current for-sale homes overall as well as at different income levels. In these top 10 markets, affordability increased more this year than it did nationwide. For example, a household earning $100,000 in Dallas can afford to buy 56% of homes currently listed for sale compared to 45% last year, according to NAR.
According to April 2020 employment data, employment declined by an average of nearly 13% in the largest 100 metro areas compared to last year. However, in Dallas, Houston, Salt Lake City, and Phoenix, employment dropped 8% from a year earlier.
The 10 markets listed had a smaller share of workers, on average, in industries most affected by the pandemic-induced economic lockdown. For example, in Durham and Des Moines, 15% and 17% of employees, respectively, work in industries at high risk from coronavirus. The average for the largest 100 metropolitan areas is 21%.
Another common factor among these markets is better-than-average inventory availability. For Des Moines and Omaha, the number of active listings in April 2020 increased by 5% and 1%, respectively, according to realtor.com. However, inventory declined 18% on average in the largest 100 metro areas.
Three in 10 residents in these markets – 30% – are millennials. With millennials making up the largest cohort of homebuyers, these areas are expected to see many of their millennial residents become homeowners.
To view NAR’s Top 10 Most Favorable Areas for Millennials During the Pandemic report, click here.
Source: National Association of Realtors