New Survey Shows 66%
of Millennials Want to Live in the Suburbs, By Kris Hudson, Jan. 21, 2015 10:19
p.m. ET
LAS
VEGAS—One of the hottest debates among housing economists these days isn’t the
trajectory of home sales, but whether millennials, those born in the 1980s and
1990s, want to remain urbanites or eventually relocate to the suburbs.
Some
demographers and economists argue that the preference of millennials, also
called Generation Y, for city living will remain long lasting. And surveys of
these young urban residents have tended to show that they don’t mind small
living quarters as long as they have access to mass transit and are close to
entertainment, dining and their workplaces.
But
a survey released Wednesday by the National Association of Home Builders, a
trade group, suggested otherwise. The survey, based on responses from 1,506
people born since 1977, found that most want to live in single-family homes
outside of the urban center, even if they now
reside in the city.
“While you are
more likely to attract this generation than other generations to buy a condo or
a house downtown, that is a relative term,” said Rose Quint, the association’s
assistant vice president of survey research. “The majority of them will still
want to buy the house out there in the suburbs.”
The survey,
which was released at the association’s convention in Las Vegas, found that 66%
want to live in the suburbs, 24% want to live in rural areas and 10% want to
live in a city center. One of the main reasons people want to relocate from the
city center, she said, is that they “want to live in more space than they have
now.” The survey showed 81% want three or more bedrooms in their home.
The preferences
of millennials are important to nearly every U.S. industry because of their
size, which is estimated at between 70 and 80 million.
Not since the
baby boomers, a generation that counts roughly 76 million people, has there
been such a big population bulge. For home builders, the survey results carry
particular importance.
“The preference
for the suburbs suggests that future demand will be in the form of
single-family homes rather than condominiums more prevalent in cities,” said
David Berson, chief economist with Nationwide Insurance Co. “That’s also good
news for future suburban single-family sellers, many of whom are baby boomers.”
The survey
results, though, could be skewed because they included only millennials who
first answered that they bought a home within the past three years or intended
to do so in the next three years. That excluded young people who intend to rent
for many more years, which is a large and growing group, in part because of
hefty student debt and the tight mortgage-lending standards of recent years.
The
homeownership rate among heads of household 35 years of age or younger was at
36% in last year’s third quarter, the most recent data available. That is the
lowest figure since the Commerce Department started tracking the data on a
quarterly basis in 1994 and well short of the recent high of 43.1% in the third
quarter of 2004.
Another factor
leading to fewer young people buying homes is that women are waiting until
later in life to have their first child. The average age of a mother at her
first childbirth was 25.4 years in 2010, up from 22.7 in 1980, federal
statistics show.
Stockton
Williams, executive director of the Terwilliger Center for Housing at the Urban
Land Institute, a nonprofit research group, said that many millennials still
don’t have the financial resources to buy a home in the aftermath of the
recession.
“There may be a
strong interest, but there might also be a recognition that, at least for some,
the opportunity to own a home might have to wait,” he said.
Some
millennials said that they prefer to live in a house, but still enjoy living
close to the city center.
When Karla
Kingsley, a 32-year-old transportation consultant, and her fiancé bought a
single-family home last month in Portland, Ore., for $375,000, she said the
couple’s top priorities were finding a home close to restaurants, shops and
their workplaces downtown.
“That was most
important to us, to be able to walk to things from our house and to bike to
work,” she said.
Kent Piacenti,
a 33-year-old commercial litigation lawyer and his partner, took a similar
approach when they bought a three-bedroom home less than four miles from
downtown Dallas this month. The couple, who previously rented an apartment downtown,
wanted more space for their two dogs and a pool.
“My absolute
preference is to be as close to the city center as possible to be near work and
near friends,” Mr. Piacenti said. “Our entire work and social network is in the
city center.”- Write to Kris
Hudson at kris.hudson@wsj.com
Comments
This hasn’t changes over the past few
decades. New grads whose jobs were “downtown” lived there until they planned to
have kids. Then they would quit to move
to the suburbs to a new job that was often out-of state or back close to
family.
Like everyone else, the cost vs. what you get
in picking where to live is critical.
Costs go down as you move farther from big cities, so smaller cities in
the suburbs or exurbs may be ok if the jobs are not too far away. The hype for
transit villages for millennials will also fade as the economy continues to
decline. They won’t pay $1600 a month to rent an apartment unless they have an
H1b visa. Also, on-campus crime is making big city-based universities less
attractive.
Atlanta is one town where you want to avoid
living on the far East side while working on the far West side of the Metro
area. Otherwise you could have a 2 hour commute. If you change jobs and should
move, the problem is that you have to leave friends and schools. In St. Louis
you can get anywhere in 30 minutes because of the expanded highway grid they
developed over the past 40 years.
Norb Leahy, Dunwoody GA Tea Party Leader
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