These millennials aren’t afraid of commitment.
Just over 35% of people ages 18 to 35 own a home, according to data from the Census Bureau, compared to nearly four in 10 who did just six years ago. That’s a big reason the homeownership rate for all ages hit its lowest level since 1965 last year, and has only ticked up slightly since.
But in four cities in America, the majority of millennials are bucking that trend, according to a study released Tuesday by financial firm SmartAsset. Using Census Bureau data, the firm looked at homeownership rates in households headed by someone under 35 in the 200 largest cities in America.
The 4 cities where more than half of millennials own a home
1. Elk Grove, Calif. 61%
2. Gilbert, Ariz. 57%
3. Frisco, Texas 55%
4. Port St. Lucie, Fla. 54%
The No. 1 city for under-35 homeownership: Elk Grove, Calif. You’ve probably never heard of it — for many decades it was a small agricultural city — but in the past 15 years, its population has grown for two reasons: (i) homes there cost around $350,000, compared to nearly $1 million in San Francisco and (ii) it’s well located, says Asees Singh, a spokesperson for the site. Elk Grove is only about 20 minutes to the state capital of Sacramento, which has a lot of technology jobs, and under two hours to San Francisco. Indeed, millennials who do buy homes are often looking for a combination of affordability and well-paid jobs, among other lifestyle factors, says Cheryl Young, the senior economist at real estate site Trulia.
The other three cities in which more than half of millennials own homes: Gilbert, Ariz., Frisco, Texas and Port St. Lucie. Similar to Elk Grove, millennials like both Gilbert and Frisco because they are short (roughly 45 mintues) drives to major cities with jobs — Phoenix and Dallas, respectively — says Singh. And in Port St. Lucie, low home prices are likely the draw: The median home is under $180,000 versus about $190,000 nationwide.
While these areas are already millennial-dominant, others are attracting more millennial homebuyers. In Peoria, Ill., the number of millennials owning homes grew 8% since 2006 — likely because home prices in the area average less than $100,000. Bakersfield, Calif (where millennial home ownership rose 5% to 40% over the same period) benefits from the same phenomenon: Homes prices are, at least by California standards, affordable at just over $200,000.
In general, millennials are shunning home ownership in favor of living with their parents — more of them live at home than they have in 75 years, according to data released in December by Trulia — renting, and because of record-high levels of student loan debt, among other reasons. Fully 56% of millennials with student loan debt have delayed a major life event: The No. 1 delayed event being buying a home because of these financial obligations, according to 2016 data from personal finance site Bankrate.com. Still, says Young, a majority of them do want to eventually own a home.