Grand Rapids area remains hot market for millennial homebuyers

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A new report from Construction Coverage found the greater Grand Rapids area is one of the more attractive markets for millennial homebuyers.

COVID-19’s impact on the economy will affect homebuyers for years, likely making it more difficult to buy everywhere, but the Grand Rapids/Wyoming area remains a hot market for millennials.

The Grand Rapids-Wyoming metro ranked 114 among 258 metros in all 50 states with a composite score of 77.8. The area has a median home price of $219,009 and median full-time earnings for millennial workers is $40,000.

Comparatively, the top-ranking metro for millennial homebuyers was Johnstown, Pennsylvania, with a composite score of 95.93. The median home price was $76,981, and the median earnings for full-time millennial workers was $38,000.

At the bottom of the list was Santa Maria-Santa Barbara, California, with a composite score of 53.9. The median home price was $639,124 and millennial workers earned a median $36,000 per year.

According to the U.S. Census Bureau, the homeownership rate for Americans under 35 grew to roughly 37% in 2019. However, homeownership among today’s millennials is still below its peak of 43% in 2004 and woefully below the national rate of 65% across all major regions of the U.S.

Methodology

To find the best cities for millennial homebuyers, Construction Coverage created a composite score for each metropolitan area and state based on the following factors:

  • Home affordability (median millennial earnings as a share of home prices): 60%
  • Unemployment among millennials: 15%
  • Cost of living: 15%
  • Projected home value growth: 10%

The current and projected home price data used in the analysis are from the Zillow Home Price Index. The estimated monthly mortgage payment is based on the Zillow Home Price Index and assumes a 30-year fixed mortgage, 20% down payment and 4.4% interest rate.

Median earnings for full-time millennials and the unemployment rate among millennials were calculated using the U.S. Census Bureau’s 2018 American Community Survey 1-Year Public Use Microdata Sample.

Full-time workers are defined as those working 35 hours or more each week for at least 50 weeks that year. Millennials are those individuals between 22 and 37 years old in 2018.

Only metropolitan areas with at least 100,000 residents and data from Zillow were included.

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