Millennial Home Buyers Flock to Pittsburgh, Provo, Buffalo and Rochester

Key highlights from this report:

  • Millennial home buyers in the U.S. appear to be flocking to the more affordable housing markets while avoiding coastal cities.
  • Pittsburgh, Provo, Buffalo and Rochester were among the most popular locations for this group.
  • Pittsburgh, Pennsylvania had the highest percentage of millennials applying for a home mortgage in 2018 (at 56%).

Millennial Home Buyers Seek Affordability

According to a March 2019 report by the housing information and research company CoreLogic, millennial home buyers are most prevalent and active within the more affordable real estate markets across the U.S.

Cities like Pittsburgh, Pennsylvania and Buffalo, New York topped the list of housing markets where millennials make up a relatively higher percentage of overall buyers.

In these and other metro areas, millennial home buyers can get more house for the money. Also, as a result of lower prices and smaller mortgage amounts, they often have an easier time qualifying for loans.

Quick stats:

  • By most definitions, a “millennial” is someone born between the years 1981 and 1996.
  • Many of these folks are now entering “prime home-buying age,” according to the report.
  • In 2018, the average age of millennials who applied for mortgage loans to buy a house was 31.
  • Millennials made up the largest age-related segment of home buyers in 2018, accounting for 44% of all mortgage loan applications (a 2% increase over the previous year).

The number of millennial home buyers (as a percentage of all buyers) can vary greatly from one region to the next. Generally speaking, the more affordable real estate markets in the U.S. tend to have a higher percentage of these younger buyers.

According to the CoreLogic analysis, millennials make up a comparatively higher percentage of home buyers in housing markets located in the Midwest. In contrast, there’s a lower proportion of them within the nation’s more expensive coastal real estate markets.

And that makes sense, when you consider that most millennials are first-time buyers who do not have proceeds from a previous home sale to put toward their next purchase. Surveys have also shown that affordability is often a top priority among these buyers.

Hot Markets: Pittsburgh, Provo, Buffalo, and Des Moines

To come up with these rankings, the company looked at the 100 most populous metropolitan areas in the United States. They then determined the “number of applicants who applied for home-purchase mortgage loans in 2018.”

Real estate investors and second-home buyers were excluded from this particular study.

Based on that analysis, the following U.S. metros had the highest share of millennial home buyers. (The numbers shown beside each metro represent the percentage of millennials as a share of all home-buying activity in the area.)

  • Pittsburgh, Pennsylvania — 57%
  • Provo, Utah — 56%
  • Rochester, New York — 55%
  • Buffalo, New York — 55%
  • Des Moines, Iowa — 54%

At the other end of the spectrum, metro-area real estate markets located in California and Florida had the lowest percentage of millennials applying for a home-purchase loan.

According to the report:

“Our data indicates that millennials were applying for mortgages in bordering states with lower home prices. For instance, millennial applicants from New York applied for home-purchase mortgages mostly in New Jersey and Pennsylvania, and applicants from California applied for mortgages in Nevada (and mostly in Texas). Millennials’ choices were affected by home affordability.”

Big Home-Price Gains in These Markets

Several of the real estate markets on this list share something else in common as well. In addition to having a relatively higher percentage of millennial home buyers, these markets are all fairly hot right now with above-average home price growth.

For example, the median house value in Pittsburgh rose by more than 10% over the past year or so, according to Zillow. That was quite a bit higher than the national average of 7.2% during that same 12-month period. As of spring 2019, Pittsburgh is an active real estate market with strong demand from buyers.

The median home value in Provo, Utah rose by a whopping 17.4% over the past year, according to Zillow. That’s more than double the national average for that same period. The Provo real estate market will likely outpace the nation as a whole through 2019 and into 2020, as well.

The housing market in Buffalo, New York also rose by double digits over the past year. Buffalo is another hot real estate scene with strong demand from buyers — many of whom are millennials.