According to new research from Ernst & Young, Millennials are more likely to purchase a home in the suburbs than in the city. Moreover, the findings actually include the groups of millennials who both own and rent. According to CNBC, “when choosing where to live, millennials are behaving much like their parents did. Overall, rent or own, 38 percent of millennials live in the suburbs, compared to 37 percent in the city.”
Why this matters: This is a reversal of a trend that just a few years ago saw only 36% of the millennial population opting to purchase a home in the suburbs over cities. Now, among millennial homeowners, the suburbs are the definite number one choice, with 41% of them opting for non-urban dwellings.
Can you blame them: Cost is one of the biggest factors driving this decision. On average, home buyers can expect to pay over 26 percent of their income to purchase a “median-value” home in the city, whereas a similar home in suburbs will only eat away at 20% of their income according to a report from Zillow. Age is also playing a factor. Millennials are getting older, settling into their careers, getting married, and having kids. Not only do all of those major life events impact the savings account, but a lot of these young men and women want more space to lay the foundation for their families.
Big Picture: There are still more millennials that rent rather than own. In the same survey from above, EY noted that just 2 out of every 5 millennials currently own a home. Although this is up 14% from two years ago, a majority are still either forced to, or opting for the renting lifestyle. Pricey real estate and student loan debt have delayed this decision for most. With that said, as more and more millennials find stable footing expect the migration to the ‘burbs to continue. That won’t mean the end of cities though. “Post-millennials” as they called, are one of the most diverse generations in America’s history and they will most certainly be opting for cultural melting pots like New York and Los Angeles.