Top 10 Markets for Millennial Homebuyers During the Pandemic — NAR Report: Houston, Austin, Dallas Included
NAR Chief Economist Lawrence Yun speaks to journalists in Boston. Photo credit: Ralph Bivins, Realty News Report
HOUSTON – (By Dale King, Realty News Report) – Despite the coronavirus pandemic, many young adults who hope to buy their first home should consider three Texas metropolitan areas — including Houston — and their surrounding suburbs.
The National Association of Realtors (NAR) recently identified 10 U.S. metropolitan areas that show particularly favorable conditions for millennial homebuyers during the pandemic.
Listed alphabetically among those markets are Austin-Round Rock, Dallas-Fort Worth-Arlington and Houston-The Woodlands.
“Record-low mortgage rates have improved housing affordability, bringing more buyers into the market, and multiple offers for starter homes could become common in these metro areas,” said NAR Chief Economist Lawrence Yun.
“With relatively stronger employment conditions and a large millennial population in these markets, additional new home construction will be needed to meet housing demand as the economy reopens.”
NAR produced its top-10 list by analyzing current housing affordability, local job-market resilience during the pandemic, the share of millennials in each area, and available inventory across the 100 largest metropolitan statistical areas in the country.
Austin, Dallas and Houston — along with their suburban communities — stood out for their millennial-focused market dynamics, according to the association.
“Nationally, millennials represent the largest share of homebuyers, and these metropolitan areas offer strong opportunities for that generation to achieve homeownership,” said NAR President Vince Malta, broker at Malta & Co., Inc., in San Francisco. Malta added that millennials are likely to lead the recovery of the real estate market from the COVID-19 slowdown.
April 2020 employment data show average job losses of nearly 13% across the 100 largest metro areas compared with the previous year.
But the 10 markets NAR highlighted experienced lower shares of workers employed in industries most at risk from pandemic shutdowns. For example, about 19% of Houston’s workforce and 20% of Austin’s work in high-risk industries, versus a 21% average across the 100 largest metros.
Inventory conditions in the top markets were also generally better than the national average. In Des Moines and Omaha, active listings in April 2020 rose by 5% and 1%, respectively, according to realtor.com, while listings fell by an average of 18% across the 100 largest metro areas.
Another shared advantage among these markets is a high concentration of potential millennial buyers. Millennials account for roughly 30% of residents in both Dallas-Fort Worth and Houston-The Woodlands, and about 35% in Austin-Round Rock. With millennials forming the largest buyer cohort, many of these residents are expected to transition into homeownership.
Nationally, a typical household could afford 40% of homes listed for sale, up from 34% a year earlier, according to the Realtors Affordability Distribution Score. Affordability gains in the top 10 markets outpaced the national average. For example, a household earning $100,000 in Dallas can now afford 56% of homes listed for sale, compared with 45% a year ago.
NAR’s top 10 metro areas with favorable conditions for millennial homebuyers during the coronavirus pandemic (in alphabetical order):
