While a trip downtown may be an enjoyable way to spend the weekend or a four-day vacation, a new survey suggests that the city is increasingly becoming a place that's great for visiting, but not for living, based on the rate at which residents are leaving it for more spacious confines.
Among millennials, who range between 18 and 35 years old, the share of homebuyers applying for a mortgage to purchase a residence in the city has fallen to 17 percent, according to a new poll conducted by the National Association of Realtors. Last year, 21 percent bought a house in an urban or central area.
The rate at which people are buying multi-family homes has similarly slid, down to 10 percent from 15 percent in 2015, NAR reported.
Lawrence Yun, NAR chief economist, indicated one of the reasons for the exodus out of the city has to do with the dynamics of children and the added living space that's often required, or at the very least preferred.
"The median age of a millennial homebuyer is 30 years old, which typically is the time in life where one settles down to marry and raise a family," Yun explained. "Even if an urban setting is where they'd like to buy their first home, the need for more space at an affordable price is for the most part pushing their search further out."
Less than 1 in 10 prefers to live in the city
Millennials aren't the only ones who are opting to live in the suburbs. Less than 1 in 10 buyers – 8 percent – prefers to reside in a new home within the city, a survey done by the National Association of Home Builders showed. Among all generations, 66 percent would rather live just outside of the city borders, with 1 in 4 wanting a home in a rural retreat.
While spaciousness is the overriding factor that has more Americans broadening their horizons, cost of living has something to do with it as well, Yun added.
"Limited inventory in millennials' price range, minimal entry-level condo construction and affordability pressures make buying in the city extremely difficult for most young households," NAR's chief economist referenced.
Millennials represent the largest group of home buyers in America. More than 1 in 3 people who bought a house last year were in this generation, NAR reported, the third straight year that this has been the case. In 2014, millennials represented 32 percent of the home buying public.
Mortgage rates down by 33 basis points since December
With the busy spring buying season approaching, mortgage rates are well-positioned for budget-conscious consumers. For the second straight week, average 30-year fixed-rate loans rose for the seven days ending March 10, according to Freddie Mac's latest Primary Mortgage Market Survey. At 3.6 percent, 30-year FRMs were down from 3.8 percent last year at this time.
Since December of last year, mortgage rates have dropped by more than 30 basis points.
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