An increasing number of millennials, those born from 1981 to 1996, are entering the prime homebuying age. The average age of millennials applying for home-purchase mortgage applications was 31 in 2018. They were the largest cohort to finance home purchases in 2018, accounting for 44 percent of home-purchase mortgage applications during 2018, up 2 percentage points from 2017. However, the share varies across individual housing markets. Millennials’ choices were affected by home affordability, employment opportunities, local tax rates and preference for open spaces. In general, millennials have more buying power in more affordable markets compared to less affordable ones.
Millennials make up a higher portion of the homebuyers in the Midwest markets, and a lower proportion in the expensive coastal markets. Figure 1 plots the share of millennial homebuyers against the affordability index for metro areas in 2018. There is a positive relationship between millennial share and affordability. The millennial share among homebuyers is higher in more affordable markets compared to less affordable ones.
Figure 2 shows the U.S. metros based on their millennial application share in 2018. Pittsburgh had the highest percentage of millennials applying for a home mortgage (57 percent), followed by Provo, Utah (56), Rochester, New York (55), Buffalo, New York (55) and Des Moines, Iowa (54).
Conversely, metros in Florida and California had the lowest percentage of millennials applying for a home mortgage. North Port, Florida had the lowest percentage (24), followed by Cape Coral (30), Oxnard (32), Palm Bay (33) and Miami (35). Las Vegas and Los Angeles were among the 10 metros with lowest percentage of millennial applicants.
Our data indicates that millennials were applying for mortgages in bordering states with lower home prices. For instance, millennial applicants from New York applied for home-purchase mortgages mostly in New Jersey and Pennsylvania, and applicants from California applied for mortgages in Nevada (and mostly in Texas). Millennials’ choices were affected by home affordability.
In contrast to millennials, retirees preferred warmer metros. Affordability also played a role in where they applied. Retirees from California applied for home-purchase mortgages mostly in Arizona. Florida was the preferred location for retirees from New York, Illinois, Virginia, Pennsylvania, Ohio and Maryland. Thus, the millennial buyer share in Florida and Arizona metros was lower than other metros with similar affordability.
 Analysis based on the number of applicants who applied for home-purchase mortgage loans in 2018. All home-purchase mortgage applications, accepted or not, between January 2018 and December 2018 were included in the analysis. Investors and second-home buyers were excluded in the analysis.
 CoreLogic Insights Blog
 Affordability index was computed using NARs Housing Affordability Index formula.
Among the top 100 metros based on 2017 population.
© 2019 CoreLogic, Inc. All rights reserved.