Most Popular Metros for Millennial Homebuyers | LendingTree (2024)

Mortgage

Though it may sometimes seem as if millennials are destined to rent or live in their parents’ basem*nts forever, they make up the largest share of homebuyers in the U.S., surpassing older (and richer) generations. In fact, millennials have dominated the housing market for the past decade.

To highlight where millennials are looking to buy, LendingTree analyzed mortgage offers for users of the LendingTree platform across the nation’s 50 largest metros from Jan. 1 through Dec. 31, 2022.

Millennials (born between 1981 and 1996, or ages 26 to 41 in 2022) make up a majority of potential homebuyers in most of the country’s largest metros, including pricey areas like San Jose, Calif., Denver and Boston.

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Key findings

• Across the nation’s 50 largest metros, an average of 52.88% of mortgage offers went to millennials. Millennials make up the majority of buyers in 37 of the nation’s 50 largest metros. Even in the metros where a majority of purchase requests don’t come from millennials, the generation still makes up the largest group of buyers.
• Millennials make up the largest share of potential homebuyers in San Jose, Calif., Denver and Boston. In San Jose, 63.57% of mortgages were offered to millennials. In Denver and Boston, the figures were 61.35% and 60.59%, respectively.
• Millennials in Las Vegas, Birmingham, Ala., and Phoenix make up the lowest share of potential buyers — though still substantial. Across these metros, an average of 44.66% of mortgages were offered to millennials.
• Among millennials, potential homebuyers are oldest in San Francisco, New Orleans and Miami. The average age among potential homebuyers in these three metros was 33.31 years old, more than a year older than the average of 32.16 in the metros with the youngest potential millennial homebuyers — Birimingham, Ala., Salt Lake City and Denver.
• Potential millennial homebuyers have the highest average credit scores in San Jose, San Francisco and Boston. The average credit score for these three metros was 748. By comparison, the average credit score for millennial homebuyers in the metros where millennials had the lowest credit scores — Memphis, Tenn., Birmingham and Las Vegas — was 713.
• Expensive California metros San Jose, San Francisco and Los Angeles were the areas that required millennials to put down the largest down payments on their homes. The average down payment across these three areas was $129,965. For comparison, that figure was more than three times higher than the average down payment of $39,209 across St. Louis, Virginia Beach, Va., and Oklahoma City — the metros where down payments were the smallest.

Most popular metros for millennial homebuyers

No. 1: San Jose, Calif.

• Share of mortgages offered to millennials: 63.57%
• Average millennial age: 33.01
• Average credit score among millennials: 751
• Average down payment amount among millennials: $144,942

No. 2: Denver

• Share of mortgages offered to millennials: 61.35%
• Average millennial age: 32.23
• Average credit score among millennials: 735
• Average down payment amount among millennials: $74,477

No. 3: Boston

• Share of mortgages offered to millennials: 60.59%
• Average millennial age: 32.38
• Average credit score among millennials: 741
• Average down payment amount among millennials: $84,259

Least popular metros for millennial homebuyers

No. 1: Las Vegas

• Share of mortgages offered to millennials: 41.92%
• Average millennial age: 32.89
• Average credit score among millennials: 715
• Average down payment amount among millennials: $49,604

No. 2: Birmingham, Ala.

• Share of mortgages offered to millennials: 45.95%
• Average millennial age: 32.10
• Average millennial credit score among millennials: 713
• Average down payment amount among millennials: $46,998

No. 3: Phoenix

• Share of mortgages offered to millennials: 46.11%
• Average millennial age: 32.52
• Average credit score among millennials: 718
• Average down payment amount among millennials: $65,395

Why millennials dominate the housing market

Given how often we hear about the financial woes facing millennials, it might be surprising to learn that a majority of mortgage purchase requests come from members of the generation. An average of 52.88% of purchase requests come from millennials — 31.61% percentage points higher than the share of requests from Gen Xers (born between 1965 and 1980, or ages 42 to 57 in 2022), the generation that makes the second-most mortgage requests. That said, the trend makes sense for various reasons.

For example, many millennials are at an age where they’re starting families and earning more money. This means they not only have more of a financial ability to become homeowners, but they’re incentivized by reasons like needing to provide for their loved ones in a way they may not have been when more of them were in their 20s.

In that same vein, while buying a new home might make more sense when you’re younger and starting a family or becoming established in your career, it often starts to make less sense as you age — especially if you’re planning to finance your purchase with a loan. After all, it’s one thing to take out a six-figure mortgage in your 30s when you likely have plenty of time to work and pay it off, but it’s another thing to take out a mortgage when your retirement is fast approaching.

Put simply, though millennials are certainly not as financially well-off as older generations, they’re at a place where buying often makes the most sense. And as millennials age, younger generations will likely supplant them as the largest share of homebuyers on the market — even if those younger generations might also have to deal with increased financial hardships related to buying.

Tips for millennial homebuyers

With home prices and rates still high, navigating today’s housing market can be challenging. This can be especially true for millennials, many of whom may not have as much cash or experience buying a home as older generations. There are a few tips buyers of any age can consider to make the homebuying process more manageable.

• Work on your credit score. In each of the nation’s 50 largest metros, the average credit score among millennial buyers is above 700. While you don’t need a score that high to qualify for a mortgage, the better your credit score, the more likely you’ll be to find a lender willing to work with you and offer you a low rate. Work on improving your credit score by making on-time payments and keeping your spending in check.
• Pay down your monthly debts. Another factor lenders look at is your debt-to-income (DTI) ratio, or the percentage of your gross monthly income that goes toward recurring debts. Maximum DTI ratios vary by loan program, so it’s a good idea to keep your total DTI ratio (which includes your monthly mortgage and all debt payments) at 35% or less.
• Know your loan options. It can be a challenge to build credit quickly or come up with a significant down payment. But don’t stress, as many mortgage programs are designed to make homeownership easier and/or more affordable. For example, borrowers with a credit score as low as 580 and a down payment of only 3.5% may qualify for a Federal Housing Administration (FHA) loan.

Methodology

To conduct this study, LendingTree analyzed mortgage offers given to borrowers ages 26 to 41 across the nation’s 50 largest metropolitan areas from Jan. 1 through Dec. 31, 2022, along with offers given to the total population of mortgage seekers.

The metro rankings were generated by looking at the share of mortgages offered to millennials as a percentage of the total number of mortgages offered to those ages 18 to 80 in a given area. The larger the share of offers given to millennials, the higher ranking a metro received.

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