It’s no surprise that so many homebuyers are millennials — people from ages 26 to 41.
That demographic — when people typically start families and enter their prime earning years — is when buying makes sense.
So concludes a new report by the mortgage marketplace LendingTree, which examined mortgage offers made last year in the nation’s 50 largest metro areas. More than half of such mortgage offers — nearly 53% — went to millennials, who also make up the majority of buyers in 37 of those metro areas.
In San Jose, Denver and Boston — millennials make up the largest share of buyers, with more than 60% of mortgage offers.
In the sunny climes of Las Vegas, Birmingham, and Phoenix, meanwhile, they make up the smallest share — with about 45% of mortgage offers.
The average age of these mortgage seekers hovers around 32 or 33.
“Even if millennials aren’t usually as financially well off as older generations are, that’s not stopping many of them from jumping into the housing market,” wrote Jacob Channel, LendingTree’s senior economist and the author of the report.
He expects that as these young buyers “continue to age, get married and start families, the homeownership rate among millennials will likely rise even further.”
As for down payments, the pricey California cities of San Jose, San Francisco and Los Angeles required the largest down payments — an average of nearly $130,000 per home.
That’s more than three times as much as the down payment in the cheapest areas — St. Louis, Virginia Beach and Oklahoma City. There, the average down payment was just $39,000.
New York was the seventh most popular metro area for millennial mortgage-seekers, with the average millennial down payment of around $91,000.
LendingTree compared mortgage offers given to millennial borrowers with offers given to the total population of mortgage seekers ages 18 to 80.
The report concludes that “though millennials are certainly not as financially well-off as older generations, they’re at a place where buying often makes the most sense. And as millennials age, younger generations will likely supplant them as the largest share of homebuyers on the market — even if those younger generations might also have to deal with increased financial hardships related to buying.”
