BAM Key Details:
- According to a LendingTree report, millennials make up the majority of potential home buyers in 37 of the 50 largest U.S. metros.
- The most popular metros for millennial home buyers—where the highest shares of mortgages went to millennials—are San Jose, Denver, and Boston.
It’s no secret why so many adult Gen Z and Millennials are renting or living with their parents, given how the cost of buying a home has jumped in the space of one year.
But while it might seem that younger generations are doomed to basement living, renting, or “van life,” millennials actually make up the largest share of home buyers in the U.S.
So, while they’re not the richest generation, they’ve dominated the housing market for the past decade.
To shed some light on where millennials are looking to buy, LendingTree looked at mortgage offers for users of their platform across the 50 largest U.S. metros from January 1st through December 31st, 2022.
Their data shows millennials (born 1981–1996 and aged 26–41 in 2022) account for a majority of potential home buyers in most of the nation’s largest metro areas, including high-end markets like San Jose, CA, Denver, and Boston.
Millennials make up a majority of home buyers in most of the 50 largest metros
Across the 50 largest U.S. metros, an average of 52.88% (over half) of mortgage offers went to millennials, who make up the majority of home buyers in 37 of those markets.
Even in metros where millennials aren’t making a majority of purchase requests, they still represent the largest group of buyers.
Millennials account for the largest share of potential home buyers in—
- San Jose, CA—with 63.57% of mortgages offered to millennials
- Denver, CO—61.35%
- Boston, MA–-60.59%
Millennials make up the lowest share of potential home buyers in the following three metros, with an average of 44.66% of their mortgages going to buyers of this generation.
- Las Vegas, NV
- Birmingham, AL
- Phoenix, AZ
Among potential home buyers in San Jose, San Francisco, and Boston, millennials have the highest average credit scores. The average for these three metros is a score of 748.
Compare that to the average credit score of 713 for millennial potential home buyers in metros where this generation had the lowest credit scores:
- Memphis, TN
- Birmingham, AL
- Las Vegas, NV
Millennials made the largest down payments—with an average of $129,965—in pricey California metros San Jose, San Francisco, and Los Angeles. That figure is three times the average down payment of $39,209 across the three metros with the smallest down payments.
- St. Louis, MO
- Virginia Beach, VA
- Oklahoma City, OK
The three most popular metros for millennial home buyers
Here are the top three metros for millennial home buyers, based on the share of mortgages offered to home buyers in this generation.
#1—San Jose, CA
- Share of mortgage loans offered to millennials: 63.57%
- Average millennial age: 33.01 years
- Average millennial credit score: 751
- Average millennial down payment: $144,942
- Share of mortgage loans offered to millennials: 61.35%
- Average millennial age: 32.23 years
- Average millennial credit score: 735
- Average millennial down payment: $74,477
- Share of mortgage loans offered to millennials: 60.59%
- Average millennial age: 32.38 years
- Average millennial credit score: 741
- Average millennial down payment: $84,259
The three least popular metros for millennial home buyers
The lowest shares of mortgage offers going to millennials (while still substantial) are in the following three least popular metros.
#1—Las Vegas, NV
- Share of mortgage loans offered to millennials: 41.92%
- Average millennial age: 32.89 years
- Average millennial credit score: 715
- Average millennial down payment: $49,604
- Share of mortgage loans offered to millennials: 45.95%
- Average millennial age: 32.10 years
- Average millennial credit score: 713
- Average millennial down payment: $46,998
- Share of mortgage loans offered to millennials: 46.11%
- Average millennial age: 32.52 years
- Average millennial credit score: 718
- Average millennial down payment: $65,395
The #1 reason why millennials dominate the housing market
Despite what we often hear about the financial challenges facing millennials, a majority of mortgage purchase applications come from members of this generation.
Millennials are responsible for an average of 52.88% of purchase mortgage requests—31.61% higher than the share of mortgage requests attributed to Gen X (born 1965–1980 and aged 42–57 in 2022), the generation responsible for the second-largest share of mortgage requests.
Millennials are at an age when they’re typically earning more money and starting families. They’re better able financially to become homeowners.
They’re also incentivized by the need to provide for their growing families in a way that may not have been necessary (or possible) when they were in their 20s.
Buying a new home at this stage, when they’re getting established in their careers, makes sense, even if millennials are generally not as affluent as older generations.
As millennials age, Gen Z (and younger generations) will likely take their place as the largest generation of home buyers on the market, even if they’re faced with greater financial hardships related to home buying.
Top takeaways for real estate agents
If you serve one of the top metros for millennial home buyers, take into consideration that younger generations typically have less cash to work with, along with less experience with the home buying process.
Be prepared to guide them through the murk of misleading headlines and to provide the data and tools they need to make their first home purchase a positive and educational experience.
Leverage those daily conversations you’re having with your lending partners to give these clients a heads-up on any changes in mortgage rates and loan options that could affect them.