Less than 40% of millennials in Denver neighborhoods own their own home. That surprises me. Because, Denver homes priced less than $500,000 have skyrocketed every month this year except for April. That’s when our industry was locked-down from in-person showings.
So, our most affordable homes in Denver neighborhoods and the suburbs sell at a record pace while the number of those homes for sale declines nearly every month.
And, home prices are increasing even though the pandemic. The average price home selling under $500,000 January was just over a $364,000. Today it’s above 377,000. So prices are going up his homes sell at frantic paces.
Millennial’s Housing in Denver Neighborhoods
The most obvious possible cause is that millennial’s are finally starting to buy homes and condominiums that they been renting. Not true! All around the country millennials home ownership lag other demographics in home ownership. Denver’s low percentage is typical of the whole country.
Denver Mortgage Loans For Millennials
Of course, some markets with lower priced homes and more affordable homes do better. For example, 48% of millennials in Salt Lake City now own real estate. In addition, Denver’s median income for millennials aged 25-40 is only $47,300 per year. That will not even qualify a millennial for the average priced at $448,000 with a minimum down payment. Here, a millennial usually needs 20% or so down payment with a Denver mortage lender for that average priced home.
Of course, a Denver mortgage loan with a 3% down payment loan could purchase a lower priced home. But, most millennials also tend to want urban properties “in the heart of the action”. At least, there used to be action in the bars and restaurants downtown before Corona virus. Millennials tend to choose walk-able Denver neighborhoods downtown. That trend increased in the last few year. But, it is hardly “new”. For decades millennials have flocked to the city. In fact, I did before I married in the 1970’s. .
The study conducted by Porch.com contrasts the millennial home ownership rate nationally of 39.5% to the overall 64% rate for all ages. That national number is exactly the same for millenials.
Why Denver Millenials Avoid Home Ownership
We can speculate why millennials tend to delay home ownership. Most commonly, experts cite delay of marriage and family formation, student debt and their preference for expensive, urban living tops the reasons they tend to rent more than buy their housing. In Denver, we have noticed that millennials who do form family units tend to want to own homes. Some are even choosing less expensive suburban living. The same home in the suburbs usually cost less than half in the suburbs.
Of course, the suburbs usually are “cool” and trendy. But, they are more practical for many Denver home buyers.