Report: The Millennials Follow Their Parents to the ’Burbs
The oldest members of the Millennial generation are now entering their 30s, by which time many young adults have begun thinking about raising children.
And as their thoughts turn in that direction, their search for a place to raise them has pointed them towards the suburbs.
That’s one of the main findings in this year’s “Home Buyer and Seller Generational Trends” study, released this week by the National Association of Realtors.
This year’s figures show that fewer buyers under 35 are buying attached homes or units in multifamily buildings (10 percent, down from 15 percent last year) and that fewer of them are buying homes in urban neighborhoods (17 percent vs. 21 percent last year). And while the share of Millennials buying homes in the suburbs—51 percent—is a little below the overall national share of 52 percent, this is the first time that group accounted for a majority of the generation.
“What’s also interesting is the growth in home buying in other than urban areas,” said NAR Director of Research Jessica Lautz of the Millennial home buyers. “We saw the steepest decline in city centers.”
Lautz attributed the shift to two factors: Schools and affordability.
“As Millennials get married and have children, or unmarried couples decide to have children, the quality of the schools becomes important,” she said. In this year’s NAR survey, 37 percent of home buyers under 35 listed quality of the schools as a factor influencing their home buying decision, a higher share than any group other than Generation X and well above the overall national share of 25 percent.
But even more—50 percent—said overall affordability of homes was a factor, the highest percentage of all the age groups. Millennials, Lautz said, “have lower incomes, so they’re looking for homes at a lower price point where they can afford to house a family.”
Part of this is also driven by student loan debt, a burden that hangs over the heads of 44 percent of Millennial home buyers. Lautz said that in the mid-Atlantic region that includes Greater Philadelphia, a strengthening job market could be reducing the significance of that debt, for this part of the country has a higher share of first-time home buyers than other regions.
For city neighborhoods to retain their appeal to Millennials, Lautz said, they needed to address both school quality and affordability. “If there’s growth in new construction at lower price points” in cities, she said, “that could attract Millennials with children, but the quality of the schools is key.”
In the meantime, those new Millennial suburbanites could end up remaking the suburbs the same way they’ve remade city neighborhoods. “They prize short commutes, so close-in suburbs would appeal to them,” said Lautz. “So would communities where they can walk around with their kids in strollers but still get into the city quickly and easily.”