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LendingTree Ranks Most Popular Cities for Millennial Homebuyers

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Millennials are growing older, and that means they’re moving up in their careers, having children and buying homes.

To determine where millennials are looking to buy homes, LendingTree, one of the nation’s leading online loan marketplaces, analyzed new purchase mortgage requests made in the nation’s 50 largest metros on our online marketplace from January to November 2019.

Millennials (defined as born between 1981 and 1996) make up a significant share of potential homebuyers in all of the country’s largest metros. And they comprise the majority of potential homebuyers in certain markets, including New York City, San Jose, Calif. and Minneapolis.

Key findings

  • Minneapolis, Buffalo, N.Y. and San Jose, Calif. are the metros where millennials make up the largest percentage of purchase requests. In Minneapolis, 56.2% of purchase requests came from millennials. In Buffalo, N.Y. and San Jose, Calif., the numbers are 56.1% and 55.8%, respectively.
  • In Tampa, Fla., Las Vegas and Miami, millennials are making fewer purchase requests. Millennials made just 40.3% of the purchase requests in Tampa, Fla., and Las Vegas, and only 43.6% of the purchase requests in Miami.
  • Millennial homebuyers in San Francisco, San Jose, Calif. and Los Angeles are the oldest in our study. The average age for these three areas was 31.6 years old, nearly a year older than the average 30.8 across the remaining 47 largest metros in the country.
  • Buffalo, N.Y., Detroit and Minneapolis are the metros with the youngest potential millennial homebuyers. The average age for these three areas was 30.2 years old.
  • San Jose, Calif., San Francisco and San Diego are markets where potential millennial homebuyers had the highest average credit scores. The average credit score for these three areas combined was nearly 711. By comparison, the average credit score for millennial homebuyers across the 50 largest metros in the country was 658.
  • Millennials in Oklahoma City, Louisville, Ky. and Memphis, Tenn., had the lowest average credit scores. Credit scores in these three areas were 633, 632 and 625, respectively.

Most popular cities among millennial homebuyers

1. Minneapolis

Share of mortgage requests coming from millennials: 56.2%
Average millennial age: 30.4
Average millennial credit score: 672
Average down payment amount: $31,812
Average requested loan amount: $219,590

2. Buffalo, N.Y.

Share of mortgage requests coming from millennials: 56.1%
Average millennial age: 30.1
Average millennial credit score: 652
Average down payment amount: $20,777
Average requested loan amount: $137,739

3. San Jose, Calif.

Share of mortgage requests coming from millennials: 55.8%
Average millennial age: 31.7
Average millennial credit score: 720
Average down payment amount: $148,098
Average requested loan amount: $637,201

4. Denver

Share of mortgage requests coming from millennials: 55.3%
Average millennial age: 30.8
Average millennial credit score: 682
Average down payment amount: $49,361
Average requested loan amount: $316,524

5. Salt Lake City

Share of mortgage requests coming from millennials: 54.9%
Average millennial age: 30.5
Average millennial credit score: 675
Average down payment amount: $39,071
Average requested loan amount: $264,275

Least popular cities among millennial homebuyers

1. Tampa, Fla.

Share of mortgage requests coming from millennials: 40.3%
Average millennial age: 30.9
Average millennial credit score: 644
Average down payment amount: $25,584
Average requested loan amount: $191,983

2. Las Vegas

Share of mortgage requests coming from millennials: 40.3%
Average millennial age: 31.1
Average millennial credit score: 646
Average down payment amount: $33,361
Average requested loan amount: $245,093

3. Miami

Share of mortgage requests coming from millennials: 43.6%
Average millennial age: 31.1
Average millennial credit score: 660
Average down payment amount: $38,467
Average requested loan amount: $248,363

4. Jacksonville, Fla.

Share of mortgage requests coming from millennials: 43.7%
Average millennial age: 31
Average millennial credit score: 638
Average down payment amount: $23,284
Average requested loan amount: $182,469

5. Phoenix

Share of mortgage requests coming from millennials: 43.7%
Average millennial age: 30.6
Average millennial credit score: 651
Average down payment amount: $30,911
Average requested loan amount: $230,148

What should millennial buyers do?

The biggest challenges for millennial homebuyers are having enough money for a down payment and a good credit history. Potential buyers should educate themselves on how to improve their credit scores and create a savings plan to raise their down payment.

From a housing market perspective, tight inventory is boosting prices in many markets, and new construction isn’t keeping up with high buyer demand. As affordability declines, borrowers should consider all of the programs available to assist them in becoming homeowners, such as low down payment loan options and government-insured loans, to name a few.

Methodology

LendingTree analyzed mortgage requests and offers for borrowers aged 23 to 38 years from Jan. 1, 2019 to Nov. 31, 2019, along with requests from the total population of mortgage seekers based on the property location. The city rankings are generated from the percentage of total purchase mortgage requests received by LendingTree from borrowers in the millennial generation.

LendingTree research analyst Jacob Channel contributed to this report.

 

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