Millennials comprise the largest cohort of homebuyers as most have entered their prime purchasing years, and they just might shake up migration patterns in 2019, according to First American Financial Corp.
Financially, millennials seem to be in better positions than other generations when they were the same age. Millennials in their 30s have higher median incomes than baby boomers did in their 30s, and they’re set to surpass Gen-Xers in the same capacity, according to First American.
But affordability issues remain for buyers as tight inventory drives up home prices and mortgage rates also continue to rise. Student debt levels, higher among millennials than previous generations, also take a financial toll on young adults, but are more likely to delay homeownership rather than prevent it altogether, according to a Federal Reserve study.
These burdens will likely push millennials away from coastal markets this year, in favor of more affordable, local housing markets.
“If current millennial home buying patterns continue, we are likely to see a big shift in where housing demand is strongest. Millennials are pursuing their homeownership dreams and migrating to more affordable, growing inland cities,” read a First American report written by Senior Economist Odeta Kushi.
Differing millennial behaviors and lifestyle choices have resulted in lower homeownership rates for the generation, but they’re soon expected to grow and subsequently have a significant impact on the overall housing market.
Aside from financial factors, proximity to jobs will also play a role in determining which cities millennials choose to call home.