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millennial

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Seattle is 7th Hottest Millennial City

What are the hottest cities for Millennials to buy homes in for 2016? A recent Realtor.com article outlines, "Where's Hot - and Where's Not - For Home-Buying Millennials" in the coming year. As Yuqing Pan writes millennials are making their presence known in the housing market: "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."

Rather than try to move to "trendy" cities with high price tags such as New York City and Los Angeles, "young home buyers are increasingly turning to cities that are relatively affordable and have lots of jobs and maybe even a trendy atmosphere all their own." And one of those more affordable cities for 2016 is likely to be Seattle.

With a median listing price of $398,000 and a 14.9% population share of older millennials, Realtor.com places Seattle 7th on their list of 10 cities, writing that "the headquarters of Microsoft, amazon, and many other tech companies large and small" mean that there has been "an influx of educated, young tech workers, which contributes to its uniquely cool culture." And of course, don't forget about Starbucks of course!

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RENTING VS. BUYING ACROSS U.S. MARKETS

According to a recent article in Business Insider, some markets favor millennials purchasing rather than renting. Based on general findings by Trulia, the article says that "buying is 36% cheaper than renting on a national basis, based on September home prices. That's the best differential since 2012 when it was 38% cheaper to buy than rent. Buying is also cheaper than renting in each of the nation's 100 largest metros." A study of millennials, however, yields a different outcome.

Key Findings:

  • "It's 23% cheaper for millennials to buy than rent in 98 out of the 100 largest metros."
  • "It's cheaper to rent in Honolulu and Silicon Valley."
  • "The South and Midwest housing markets are great for young buyers."
  • "Rising prices and rents in some markets spur big swings in the rent vs. buy math."

So where does Seattle stand? Well, according to the chart below, mortgage rates would have to rise by 1.35% in Seattle in order for renting to become cheaper than buying:

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Latest Housing Trend: Millennials Ditching Their Rents For Owning Property

While it may seem incomprehensible for the generation coming of age in the Great Recession to be purchasing homes, the rate at which rents are rising makes renting to be a less economical option for a growing number of millennials. 

While nationally the median age at which people are buying homes is rising, the situation is just the opposite here in Seattle. Despite the existence of student loan debt being the main hurdle for most millennials, many here in Seattle work in the tech industry, which allows them the ability to pay down debt quicker. Coupled with historically low interest rates on home loans and too high of rents, the ability for Seattle area millennials to purchase a home will only increase. 

Read more on Puget Sound Business Journal>>

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