They represent the largest dollar volume of new home
Millennial homebuyers south of the border are now taking on the largest share of new mortgages compared to Generation X and Baby Boomers.
The millennial generation is responsible for 42% of new US mortgage loans by dollar volume, Gen X took a 40% share and Boomers made up 17%.
Millennial homebuyers also have increased buying power according to realtor.com’s analysis of residential mortgage loan originations from Optimal Blue; and they are choosing to buy in more affordable markets, which may not have been on the radar of previous generations.
“Millennials are getting older, with better jobs and deeper pockets, allowing them to expand their collective purchase power, and hence, their footprint in the market," said Javier Vivas, director of economic research at realtor.com®.
Although millennials have a lower median purchase price ($238,000) than Gen Xers ($289,000) and Baby Boomers ($264,000), they are increasing their purchase power faster than previous generations and are starting to move on from starter homes.
But without the benefit of home equity, younger buyers have typically lower down payments than older generations at an average 8.8% in December 2018, compared to 11.9% for Generation X and 17.7% for the more equity-rich baby boomers.
More affordable areas
The analysis reveals that millennial buyers are seeking out more affordable markets with Buffalo, N.Y., the top affordable market for millennials.
It leads the markets where millennials generated more than 50% of the mortgages and grew their share by more than 4%. It’s followed by Pittsburgh, Milwaukee, Cincinnati, and Columbus, OH.
"The stereotype that millennials primarily choose to buy homes and live in large metro areas isn't the reality. Results show millennials' expansion is more heavily conditioned by affordability than in prior years, so their eyes are set on less traditional secondary markets where homes and jobs are now available and plentiful," added Vivas.
The markets favored by Gen X buyers in January were Los Angeles, Providence, R.I., Bridgeport, Conn., Jacksonville, Fla., and Atlanta.
Baby Boomers favored Knoxville, Tenn., Sacramento, Calif., Memphis, Tenn., Oklahoma City, and Riverside, Calif. loans
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