Eight in 10 millennials believe that owning a home is part of the “American Dream” and now account for about 36% of all homebuyers in the U.S., according to new research by Clever, which connects homebuyers with real estate agents.
For many first-time shoppers, the most desirable home is located in a city on the East or West Coast, but most millennials are not able to afford a home in these areas because of sky-high home prices and slowing housing markets.
Take a competitive housing market such as Seattle. According to Clever, median home prices are around $537,800, with a 20% down payment of $107,560.
Low down payment mortgages do exist, but a survey Clever conducted earlier this year found that nearly half of millennial homeowners experienced some kind of buyer’s remorse. The number-one source of their woes? High monthly mortgage payments: 67% of millennials put less than 20% down.
To help millennials find cities to live in that are both affordable and appealing, Clever developed the Millennial Metric to identify locations that strike the perfect balance between fun and affordability for young homebuyers with limited means and high expectations.
Researchers looked at the 100 most populated cities in the U.S. and ranked them against four key metrics:
- Job opportunity: A measure of income, wage growth and unemployment
- Home affordability: A measure of home values and price-to-income ratios
- Livability: A measure of multiple factors millennials care about
- Housing market forecast: A measure of how home values will appreciate over the next 12 months
They gave “livability” and “home affordability” more weight than “job opportunity” and “housing market forecast” in order to prioritize places that are both affordable and fun to live in.
See the gallery for the top 15 cities for millennial homebuyers.
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