CHARLOTTE, N.C., March 20, 2018 /PRNewswire/ -- LendingTree®, the nation's leading online loan marketplace, has released the findings of its study on the most popular cities for millennial homebuyers. The study found millennials in Des Moines, Pittsburgh and Buffalo are pursuing homeownership more than their counterparts in any of the nation's 100 largest cities.
Young homebuyers are at the forefront of an increasing number of buyers returning to the housing market. The largest single-age population in the U.S. is 27-year-olds at almost 4.8 million, suggesting that millennials' influence on the housing market has years to run before it peaks.
LendingTree analyzed mortgage requests and offers for borrowers ages 35 years and under between Feb. 1, 2017 and Feb. 1, 2018, along with requests from the total population of mortgage-seekers based on the location of the property to be mortgaged. The city rankings are generated from the percentage of total purchase mortgage requests received by LendingTree from borrowers in the millennial generation.
Most popular cities among millennial homebuyers
1. Des Moines, Iowa
Share of purchase mortgage requests coming from millennials: 42.4%
Average loan amount: $141,785
2. Pittsburgh, Pa.
Share of purchase mortgage requests coming from millennials: 41.9%
Average loan amount: $120,093
3. Buffalo, N.Y.
Share of purchase mortgage requests coming from millennials: 40.5%
Average loan amount: $114,087
Millennial homebuyers make up one-third of mortgage requests. 32.5 percent of all mortgage requests through LendingTree between Feb. 1, 2017 and Feb. 1, 2018 came from consumers 35 years and younger. The average loan amount requested from this age group is $166,863.
Where millennials aren't vying for homeownership. At the other end of the scale, Sarasota, Fla., Fort Myers Fla. and Honolulu had lowest shares of millennial buyers at 17.9 percent, 19.8 percent and 21.8 percent respectively. The Florida communities are popular with retirees while Honolulu is a high-cost metro, which makes it challenging for millennial buyers who are just starting out on building financial and real assets.
The study also looked at other borrower characteristics and found some interesting results on the average age of the borrowers and their credit scores.
Highest average age San Francisco, San Diego, New York and Los Angeles made the top four cities with the highest average age for millennial homebuyers, all at 29.5 years and above. These cities also have the highest down payments, and the age of millennial homebuyers here reflects the long lead time needed to save for a down payment.
Lowest average age Millennials can get on the real estate ladder quickest in Charleston, W.Va., where the average buyer under 35 is 28.2 years old. Borrowers there need to raise an average of $11,942 for their down payment and borrow $102,394.
Highest credit scores Millennials in San Francisco had an average credit score of 691 and borrowed an average of $462,724 to fund their dream homes. Likewise, in Honolulu, millennials averaged a 684 credit score to borrow $407,641.
Lowest credit score Jackson, Miss. was the most accessible for millennials with lower credit scores at an average of 608. Millennials can often have low scores because of not having a long history of credit, so for prospective buyers it's encouraging that there are cities where lower score borrowers can access the mortgage market.
"The biggest challenges for millennial homebuyers are having funds for a down payment and a good credit history," said Tendayi Kapfidze, Chief Economist at LendingTree. "Potential buyers should educate themselves on how to improve their credit scores and create a savings plan to raise the down payment."
Kapfidze continued, "From a housing market perspective, tight inventory is boosting prices in many markets and millennial homebuyers must now contend with rising mortgage interest rates reducing their buying power. As affordability declines, borrowers should consider all the programs available to assist them in becoming homeowners, such as FHA loans."
About LendingTree LendingTree (NASDAQ: TREE) is the nation's leading online loan marketplace, empowering consumers as they comparison-shop across a full suite of loan and credit-based offerings. LendingTree provides an online marketplace which connects consumers with multiple lenders that compete for their business, as well as an array of online tools and information to help consumers find the best loan. Since inception, LendingTree has facilitated more than 65 million loan requests. LendingTree provides free monthly credit scores through My LendingTree and access to its network of over 500 lenders offering home loans, personal loans, credit cards, student loans, business loans, home equity loans/lines of credit, auto loans and more. LendingTree, LLC is a subsidiary of LendingTree, Inc. For more information go to www.lendingtree.com, dial 800-555-TREE, like our Facebook page and/or follow us on Twitter @LendingTree.