Many factors are involved regarding why millennials choose to move to certain locations, remain there for a significant amount of time, or soon leave after they move there. The job market and just how affordable is it in certain markets are two of the main reasons impacting these decisions by millennials, according to the National Association of Realtors’ (NAR) 2019 report “Most Popular Areas for Millennials: Where They Move and Stay.”
The report analyzed employment gains, population trends, income levels and housing conditions in the largest 100 metropolitan statistical areas across the country to identify the most popular areas for millennials. The top 10 metro areas were selected because of their high share of present millennial residents and recent movers, as well as their favorable employment opportunities, the report said.
NAR found that Madison, Wis., is one of the top destinations for millennials with 75 percent of recent movers choosing that site. Additionally, this segment of the population has mostly elected to remain in the area.
Lawrence Yun, NAR's chief economist, noted that Madison has many attributes that appeal to millennials, including earning potential. As of 2017, the median income for millennials there was $62,000, and $68,500 for millennials who recently moved to the city.
“In comparison to other areas, Madison offers one of the highest wages for millennials,” Yun said in the report. “Moreover, this income level combined with the robust employment opportunities and the affordability, make Madison among one of the most appealing locations for millennials who are looking to stay longer and raise families.”
The report also found that California is a popular homebuying destination for millennials, specifically Bakersfield, which is between San Francisco and Los Angeles. Bakersfield – where 28 percent of millennials live and where 67 percent move to – is attractive to millennials because it is one of the most affordable metro areas in the state.
Yun has called for more West Coast housing and construction.
“Bakersfield's affordable homes make it inviting to millennials,” Yun said. “Of the millennials, who recently moved there, it was determined that they can afford to purchase nearly 15 percent of the homes listed for sale there. This is in comparison to neighboring Los Angeles, Calif., where millennials can only afford to buy 4 percent of listed homes.”
Other notable findings in the report included:
- One out of two people who moved in the 100 largest metro areas was a millennial (54 percent), and one of four residents was also a millennial (25 percent);
- In the top 10 metro areas, millennials can afford to purchase, on average 17 percent of homes currently listed for sale. In 2017, affordability was low in most of the areas that millennials moved to that year. The median income for millennials who recently moved in the 100 largest metro areas was $53,000. Millennials who moved recently in these areas can afford to purchase nearly one out of four of the homes currently listed for sale (23 percent); and
- Millennials tend to reside and move to locations and cities where employment is strong. In the majority of the top 10 metro areas, the unemployment rate was lower than the national level in February 2019. Specifically, on average, the unemployment rate was 3.6 percent in these areas.