Millennials are dominating the Des Moines housing market. That's an odd piece of information that seems a little less odd — and a little more important — the longer you ponder it.
Roughly 60% of borrowers who used a mortgage to buy a home in Iowa's capital city during the first half of 2015 were aged 25 to 34, according to data from Realtor.com. That compares with a national average of 37%, and makes Des Moines the most millennial-friendly city in the U.S.
(Chart: 10 cities for first-time home buyers)
Most of those cities don't enjoy reputations for being particularly hip. What they are, generally, is cheap — and probably
a little hipper than they get credit for. That makes a difference as young homebuyers finally shake off the effects of the
recession and enter the housing market.
Historically, people 25-34 have made up the largest share of homebuyers, said Jonathan Smoke, chief economist for Realtor.com. (More specifically, Mr. Smoke cited data that showed the age cohort is the most likely to take out a mortgage to buy a home, rather than to refinance.)
The explanation is straightforward. People in their early 20s are less likely to be ready to buy, and people past their mid-30s are more likely to have already bought.
(More: Gen X worse off than millennials)
The millennial generation has bucked that trend, for reasons that have been cause for disagreement and
consternation. Slow wage growth,
student loan debt, a preference for city living and a tendency to start families later have all been posited as reasons millennials have been slower to buy than previous generations.
The new findings may lower some of the alarm about first-time homebuyers. Thirty-seven percent of mortgage borrowers who bought homes were millennials, up from 31% in 2014. A
survey conducted by Realtor.com, meanwhile, found the most common reason millennials decided to buy homes this year was that they were making more money.
(More: Kick your kids out of the house without feeling guilty)
It helps that it costs a lot less to buy in Des Moines, where the median listing price in August was $218,000. (In San Francisco, it was $738,000.) But it's also easy to forget that there are attractive jobs in all kinds of places — about
half of jobs in science, tech, engineering and math are located in the 20 biggest U.S. metros. The rest are in places like Huntsville, Ala., and Lincoln, Neb., cities that offer the appeal of lower costs of living.
“It's so 2012 to say young people are doing miserably," said Mr. Smoke. "This age cohort is benefiting from the kind of economy and job growth we've been having."
