The millennials are heading to the suburbs, and changing the landscape forever.
If one thing’s clear about this year’s home-buying trends, it’s this: the generation that wasnevergoing to leave the cityleft.In a big way. For years, economists, marketers and real estate insiders have touted millennials as the urban generation—a generation content to stick it out in the city and eschew everything from home ownership to car purchases to traditional means of travel, cooking, grocery shopping and, overall,living.
But then the millennials moved—and they didn’t stop. Today millennials are the biggest piece of the home buying universe, making up abouttwo-thirdsof all first-time buyers and nearlytwo in fivetotalbuyers—and they aren’t slowing down. Close toone in 10millennials expects to buy a home in the next 12 months, andone in fourin the next one to two years.
Understanding the Millennial Flight
A major driving force behind this shift is the fact that the biggest millennial cohort—those born in 1990—represent a unique demographic shift: age 27 or so is when the “millennial flight” seems to start, with more and more of this sub-35 set heading the suburbia. It’s a challenge for many major cities who saw this generation as central to neighborhood revivals—but it’s a huge win for the suburbs, who are getting an influx of young homeowners, young families and, overall, young people ready to roll up their sleeves and dig into their new communities.
Millennial Peaks and Dips
Another reason for the shift? Increased housing prices in major cities. In Boston, for example, there was a “millennial peak” in 2014 and 2015. As the median rental and purchase prices rose to $2,700 and $561,000, respectively, 20- and 30somethings needed to find an alternative—and they found it in the suburbs.
The same is true in Chicago, where the peak happened around the same time, with an all-time high of814,000millennials in the city. The number dipped by a few hundred the following year, and continued to decline into 2017. LA also lost millennials—about2,500 millennials, to be exact—between 2015 and 2016. Many attributed this exodus to the increased cost of living and cost of housing, which prevents younger residents from living the lifestyle they’re looking for.
So the big question: where are they heading? New York City, LA, Dallas and Washington, DC suburbs all made the top-25 “suburbs where millennials are moving” list, with suburban growth among millennials hovering around 5% to 6%. As they continue to be priced out of the city and, beyond that, to get older, get married, have kids and make the shift just like previous generations, more and more millennials are going to head to suburbia. This “suburban renaissance” will no doubt, then, continue to grow and evolve, as these young couples and families migrate out, and make their mark on suburbs from coast to coast.
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