Millennials — the name given to the generation born between 1981 and 1996 — are understood more accurately when you divide them into two groups. The older portion of the demo are now in their thirties; the younger portion is still in their 20s.

Yet realtor.com found something surprising: it’s the younger half who is most enthusiastic about the housing market. The largest part of the Millennial generation was actually born between 1989 and 1993, which means that these “kids” will soon be reaching their thirties. Where they will be buying homes will determine the hottest housing markets in the U.S. in the years to come.

The next demo group — Generation Z — will be equally important in determining where the twentysomething homebuyers will be buying.

“Younger Americans don’t have the baggage of the recession and are better positioned to become home buyers—and reverse some of that narrative that Millennials aren’t buyers,” Jason Dorsey, president of the Austin, TX–based research group Center for Generational Kinetics, tells realtor.com.

“Cost is still the driving factor of where they want to settle down,” he says. “They need to be in a place where they think there are enough job opportunities and job security for them to make the commitment to buy a home.”

Another factor to consider: the median age for a first-time parent increased to 26 in 2016, up from 23 in 1994, according to a Pew Research Center analysis of U.S. Census Bureau data. And where there are families, there are home purchases.

Realtor.com calculated where 20-29-year-olds were buying the most homes by finding the where the highest percentage of mortgages were taken in 2018 in the 200 largest metros. The ranking was limited to one metro per state. Here are the results:

Evansville, Indiana
Percentage of mortgages issued to buyers aged 20 to 29: 33.2%

Duluth, Minnesota
Percentage of mortgages issued to buyers aged 20 to 29: 32.5%

Clarksville, Tennessee
Percentage of mortgages issued to buyers aged 20 to 29: 31.8%

Lafayette, Louisiana
Percentage of mortgages issued to buyers aged 20 to 29: 31.7%

Des Moines, Iowa
Percentage of mortgages issued to buyers aged 20 to 29: 31.1%

Provo, Utah
Percentage of mortgages issued to buyers aged 20 to 29: 30.4%

Youngstown, Ohio
Percentage of mortgages issued to buyers aged 20 to 29: 30.2%

Wichita, Kansas
Percentage of mortgages issued to buyers aged 20 to 29: 29.4%

Utica, New York
Percentage of mortgages issued to buyers aged 20 to 29: 29.2%

Grand Rapids, Michigan
Percentage of mortgages issued to buyers aged 20 to 29: 29.1%

In general nationwide, home sales may be slowing due to the Tax Cut and Jobs Act, signed into law a year ago. This legislation limits the mortgage interest deduction for homeowners.

Supply also plays an influence. The demand for entry-level homes is high, but the supply remains limited into 2019.


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