Saving

The top 10 metro areas for millennials to buy homes

Lance Lambert@newslambert
Twenty/20

Millennials may have waited longer than previous generations to buy homes, but now they're keeping real estate agents busy. This generation that some experts warned could be destined to rent forever is actually America's biggest group of homebuyers.

But the situation is a lot more stable in some places than in others. In some metro areas, high costs keep millennials from buying, or there aren't enough good jobs for prospective buyers to get approved for mortgages. Other areas offer the right mix of affordability and, usually, higher-than-normal salaries — and those places are generally where 20- and 30-somethings are becoming owners.

Based on our analysis of data from the U.S. Census Bureau and Zillow on salary, home prices, and the share of homes owned by people aged 21 to 38, here's our list of the top 10 metro areas where millennials can actually afford to buy homes. On average, millennials in these top 10 metros are 25% more likely to own a home than their peers across the country.

Metro areas where millennials can afford to buy homes

  1. Des Moines, Iowa
  2. Grand Rapids, Michigan
  3. Wichita, Kansas
  4. Omaha, Nebraska
  5. Toledo, Ohio
  6. Dayton, Ohio
  7. Oklahoma City, Oklahoma
  8. Little Rock, Arkansas
  9. St. Louis, Missouri
  10. Syracuse, New York

The places that topped our ranking on average have 3% lower earnings for folks age 25 to 44, a range that includes most millennials. They make up for it, however, with home prices that are 38% lower than the national median list price of $291,900, according to Zillow. That's much better bang for the buck.

Here's what we found these metro areas have in common.

They offer good employers and solid paychecks

The places that made our top 10 manage to strike a middle ground between good pay and reasonable home prices.

Wichita, at No. 3, is home to the corporate headquarters of Koch Industries, the country's second-largest private firm. And paychecks stretch a lot further in Wichita, where the median list price, $184,900, is 44% lower the nationwide median.

In Des Moines, which ranks No. 1, as it does on our list of the top 10 cities where millennials are doing the best financially, the unemployment rate is just 2.1%. Millennial median household income in Des Moines is $78,200, or 17% higher than the nationwide figure, while housing prices are 20% lower.

Any buyer that comes in and starts looking at what it cost to rent vs. buy and weighing the options, they'll see it's better to own.
John Blair
regional sales manager at Commerce Bank in St. Louis

Millennials benefit from Midwestern affordability

In 2018, David Kranker decided he was tired of the big-city cost and hassle and wanted a change of scenery. The 25-year-old's digital marketing employer in Chicago allowed him to work remotely, so he started researching where his dollars would go the furthest.

He didn't have to go far: In November he bought a home in Grand Rapids, Michigan, which ranks No. 2 on our list.

"For the same price as a little 600-square-foot box in Chicago, you get a full two-story home in Grand Rapids," Kranker said. He snagged a home for just $180,000. "I have definitely felt the cost savings. My grocery bill went from $115 per week to $45 per week. And that's more money you can put towards mortgage payments."

That helps explain why eight of the top 10 metros we ranked are located in more affordable Midwestern states.

Here, a mortgage payment can be less than rent

In cities like New York and Seattle, the price of a mortgage is often more than people pay in rent. But in the metros we ranked, usually the cost of a monthly mortgage payment is lower than the cost of rent.

It would cost just under $800 per month to get a mortgage on a median priced home of $209,900 in St. Louis, if you put down 20%. That looks like a good deal when considering the median one-bedroom rent in St. Louis is $865, according to Zillow.

You "can own an asset versus paying off someone else's asset," says John Blair, regional sales manager at Commerce Bank in St. Louis. "Any buyer that comes in and starts looking at what it cost to rent vs. buy and weighing the options, they'll see it's better to own."

More from Grow:

Get the Grow Newsletter Every Week
The best money advice you never got, delivered to your inbox weekly.
The best money advice you never got, delivered to your inbox weekly.
 

Twenty/20
acorns+cnbcacorns cnbc

Join Acorns

GET STARTED

About Us

Learn More

Follow Us

All investments involve risk, including loss of principal. The contents presented herein are provided for general investment education and informational purposes only and do not constitute an offer to sell or a solicitation to buy any specific securities or engage in any particular investment strategy. Acorns is not engaged in rendering any tax, legal, or accounting advice. Please consult with a qualified professional for this type of advice.

Any references to past performance, regarding financial markets or otherwise, do not indicate or guarantee future results. Forward-looking statements, including without limitations investment outcomes and projections, are hypothetical and educational in nature. The results of any hypothetical projections can and may differ from actual investment results had the strategies been deployed in actual securities accounts. It is not possible to invest directly in an index.

Advisory services offered by Acorns Advisers, LLC (“Acorns Advisers”), an investment adviser registered with the U.S. Securities and Exchange Commission (“SEC”). Brokerage and custody services are provided to clients of Acorns Advisers by Acorns Securities, LLC (“Acorns Securities”), a broker-dealer registered with the SEC and a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”) and the Securities Investor Protection Corporation (“SIPC”). Acorns Pay, LLC (“Acorns Pay”) manages Acorns’s demand deposit and other banking products in partnership with Lincoln Savings Bank, a bank chartered under the laws of Iowa and member FDIC. Acorns Advisers, Acorns Securities, and Acorns Pay are subsidiaries of Acorns Grow Incorporated (collectively “Acorns”). “Acorns,” the Acorns logo and “Invest the Change” are registered trademarks of Acorns Grow Incorporated. Copyright © 2019 Acorns and/or its affiliates.

NBC Universal and Comcast Ventures are investors in Acorns Grow Incorporated.