Home > 2016 > Mortgages

The 10 Hottest Markets for Young Homebuyers

Advertiser Disclosure Comments 0 Comments

There is much discussion about the inability of young people to buy homes — let alone move out of their parents’ homes — and how the lack of first-time buyers is hurting the entire housing market.

Plenty of charts and data, including stories we’ve run on Credit.com, show how unaffordable many big U.S. cities can be.

But a new study by LendingTree claims millennials are looking for home loans in many places. In fact, the 34-and-under crowd made up nearly half the mortgage requests that flowed through LendingTree during the past 12 months for cities like Boston, Pittsburgh and Washington, D.C., LendingTree said. Cities like Des Moines, Iowa, Minneapolis and Omaha, Neb., weren’t far behind.

“The under-35 crowd had been, for some years, hesitant to enter the housing market, but we’re seeing that start to shift,” said Doug Lebda, CEO of LendingTree. “The data all points to the fact that millennials are increasingly eager to own rather than rent, and even the incredibly high real estate prices in some markets don’t necessarily deter them.”


The LendingTree data comes with some caveats; it only represents requests for information made through the site, so the sample studied might skew tech-heavy. But the data is consistent with other studies.

RealtyTrac, a housing analyst firm, recently crunched the numbers on affordable markets and came up with similar results.

“Many of the same markets mentioned in the study … are on this list,” said Daren Blomquist, RealtyTrac senior vice president. “When filtering for affordability, the markets most likely to see an increase in millennial ownership are those with the combination of an increase in the millennial share of the population and relatively affordable homes to buy.”

Getting millennials to buy homes is incredibly important to generating a sustainable housing market recovery. First-time homebuyers are needed to help generate market activity— without them, homeowners cannot trade up into larger homes.

“The millennial generation is the key to a sustained real estate recovery and boomers who are downsizing are helping open the door for many first-time homebuyers while also driving demand for purchases and rentals in the markets where they are moving,” Blomquist said.

Numbering 43.5 million, the older group of millennials (aged 25 to 34) makes up 13.6% of the U.S. population but fully 30% of the current population of existing-home buyers, according to Realtor.com.

Millennials stuck at home also aren’t forming households, so they aren’t buying couches, lamps, refrigerators and other items associated with wider economic activity. The living-at-home phenomenon remains a big problem. In 2014, according to the Pew Research Center, 14.7% of those aged 25-34 lived with their parents, the highest percentage recorded since the Census Bureau started counting in 1960.

But LendingTree says there may be light at the end of the tunnel.

“Overall, we’ve seen a 28.5% increase in loan requests from millennials this past year over the prior one, evidence that the appeal of homeownership is strong — and growing — for young buyers,” said Lebda.

Ironically, at least some of that new demand might not be the result of better prospects for young people, but rather the punishing increases in rents, which is nudging young people towards mortgages.

That effect isn’t universal, however. In blistering-hot Portland, rents are rising faster than anywhere in the nation, according to ABODO.com.

Still, it ranked 50th of 50 markets in LendingTree’s study of places where young people are inquiring about mortgages (Only 38% of the market). Also near the bottom: San Jose, Calif., (also 38%), Aurora, Colo. (39%) and naturally, New York City (39%).

For its study, LendingTree examined request for mortgages (not mortgage applications) through its site.

“Fortunately, LendingTree’s data is typically representative of the entire U.S. population based on trends and demographics,” said spokeswoman Megan Grueling. “With that said, it is possible that it is slightly skewed, which is why we used the percentage of total requests from millennials versus other generations.”

If you want to get an idea of how much home you can buy, you can check out this home affordability calculator. (You can check your credit scores for free on Credit.com to see where you stand.) And if your credit score isn’t in good enough shape to consider buying, you can start improving your credit by checking your free annual credit report to see where you stand, and start correcting any errors you might find there.

More on Mortgages & Homebuying:

Image: Anetlanda

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

Certain credit cards and other financial products mentioned in this and other articles on Credit.com News & Advice may also be offered through Credit.com product pages, and Credit.com will be compensated if our users apply for and ultimately sign up for any of these cards or products. However, this relationship does not result in any preferential editorial treatment.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.

Our Owners

Credit.com is owned by Progrexion Holdings Inc. which is the owner and administrator of a number of business related to credit and credit repair, including CreditRepair.com, and eFolks. In addition, Progrexion also provides services to Lexington Law Firm as a third party provider. Despite being owned by Progrexion, it is not the role of the Credit.com editorial team to advocate the use of the company’s other services. In articles, reporters may mention credit repair as an option, for example, but we’ll also be sure to note the various alternatives to that service. Furthermore, you may see ads for credit repair services on Credit.com, but the editorial team isn’t responsible for the creation or implementation of those ads, anymore than reporters for the New York Times or Washington Post are responsible for the ads on their sites.

Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team