REAL ESTATE TOPICS
If you’re a Millennial looking to become a homeowner, try starting your hunt in Akron, OH. Or perhaps Indianapolis, home of the Indy 500, is more your speed. Maybe you want to settle amid the Southern charm of Memphis, TN.
Those are just a few of the top markets realtor.com® says are hot for Millennials this fall, according to an analysis of its August National Housing Trend Report.
These days, it isn’t so easy to be a Millennial in the home buying market. Half of all Millennials viewed real estate websites last month–– but higher prices and tighter lending standards have made buying a home tougher than it used to be.
The realtor.com® “Top 10 Fall Markets for Millennial Home Buyers” list shows that despite these trends, some markets are primed and ready for Millennial home buyers this fall.
What it comes down to is affordability and availability of homes on the market, according to Jonathan Smoke, chief economist for realtor.com®.
“Millennials were hit the hardest by recession layoffs and job shortages, and many are still facing the financial aftermath of the downturn, including reduced wages and depleted savings,” Smoke said. “Monthly mortgage affordability and 20% down payments have become especially difficult as home prices increase.”
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“The neighborhoods on our list offer plenty of opportunity for Millennials looking to get into the market in the next few months,” he added. “Not only are first-timers more likely to be able to afford homes in these areas, less competition in these markets means they are more likely to have their offers accepted.”
That’s good news not only for Millennial home buyers, but for the housing market as a whole—which is dependent upon this critical demographic to bring the housing ecosystem back to full health.
“Decreased first-time home buyer sales have lessened the demand for new construction, and limited housing’s contribution to overall economic growth—perpetuating a cycle of limited job and income growth,” Smoke said.
Nationally, realtor.com® data shows the housing market slowly improving with strong prices, limited inventory and steady demand. In August, homes were listed at prices 7.5% higher than last year but remained consistent month-over-month.
The total number of homes on the market in August decreased slightly when compared to last year and last month, as properties spent 86 days on the market in August—six days less than last year but four days longer than July.
Top 10 Fall Markets for Millennial Home Buyers
(Listed in alphabetical order)
| MSA | Median Listing Price | % YY | Total Listings | % YY | Median Age of Inventory | % YY | NAR[i]Affordability Index |
| Akron, OH | $119,900 | 0.0% | 4,070 | -6.2% | 76 | -11.6% | 340.53 |
| Buffalo-Niagara Falls, NY | $144,900 | 3.6% | 3,892 | -5.9% | 67 | -6.9% | 304.84 |
| Charleston, WV | $146,450 | -1.7% | 1,358 | 7.2% | 83 | -8.8% | 240.79 |
| Grand Rapids-Muskegon-Holland, MI | $159,900 | 6.7% | 5,679 | -9.6% | 61 | -10.2% | 240.48 |
| Harrisburg-Lebanon-Carlisle, PA | $174,900 | 2.9% | 5,186 | 0.9% | 103 | 2.0% | 265.94 |
| Indianapolis, IN | $149,000 | 8.4% | 11,963 | -2.5% | 72 | 0.0% | 260.60 |
| Melbourne-Titusville-Palm Bay, FL | $165,000 | 3.4% | 5,389 | 39.8% | 68 | -6.8% | 259.32 |
| Memphis, TN | $154,900 | 0.0% | 6,129 | 17.7% | 86 | 10.3% | 236.93 |
| Peoria-Pekin, IL | $129,900 | 0.3% | 2,264 | -3.7% | 76 | 4.1% | 291.78 |
| Syracuse, NY | $149,000 | -3.9% | 4,622 | 2.9% | 87 | -7.4% | 301.55 |
National Key Market Indicators for August 2014
| August 2014 | Year-over-Year Percentage Change | Month-over-Month Percentage Change | |
| Median List Price | $214,900 | 7.5% | 0.0% |
| Number of Listings | 1,930,569 | -1.1% | -2.5% |
| Median Age of Inventory | 86 days | -6.5% | 4.9% |
To be included on the the realtor.com® “Top 10 Fall Markets for Millennial Home Buyers” list, local areas had to report a Housing Affordability Index over 240 and a month-over-month or year-over-year increase in inventory.
(The National Association of REALTORS® Housing Affordability Index evaluates home prices based on the median household income for each respective area.)
Leading the pack in affordability is Akron, OH. Families making the median household income in Akron can afford to buy a home 3.4 times the price of the median home in their area.
The second most-affordable locale is Buffalo-Niagara Falls, NY, where people can afford homes 3.0 times the median. In third place is Charleston, WV, where residents earning the median wage in their area can afford a home 2.4 times the median.
Each area also had to experience an increase in the number of homes on the market.
The market with largest increase in inventory included on the realtor.com® list is Melbourne, FL, with a 39% increase in inventory compared to last year. The second largest lift in inventory is in Memphis, TN, with an increase of 17% year over year. Third place again goes to Charleston, WV, which increased 7% in listings compared to last year.
“Another advantage for Millennials trying to close on a home this fall is investors are becoming less of a presence in the current housing market,” said Lawrence Yun, chief economist and senior vice president of research for the National Association of REALTORS®. “In August, sales to investors fell to 12%, which is the lowest we’ve seen in nearly five years. For first-time home buyers, this means reduced competition and less all-cash offers in the marketplace.”
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