The Phoenix area has become one of the top places in the country for millennials to buy homes.
A new study by SmartAsset claimed that of the 40 biggest metros in the U.S. ranked Phoenix as No. 6 for the number of local millennials who bought homes in 2022. In the Phoenix metro, over 5% of millennials living in the region bought homes that year.
Using data from the Home Mortgage Disclosure Act and the U.S. Census Bureau, SmartAsset found that in 2022, 74,910 mortgages started from the millennials in the Phoenix metro, which is 5.4% of the nearly 1.4 million people living in the valley from that generation.
In Phoenix, the average home price for millennials was $465,000, and the average household income for those buyers was $104,000. The average interest rate on those mortgages was 4.8%.
Millennials between ages 25 to 40 make up 27.8% of the total population in the Phoenix metro, according to SmartAsset. Six of the top 10 cities had a bigger percentage of people in that age group, but Phoenix had way more millennials than any of the other top cities.
Phoenix Housing Market
“Millennials, born between 1981 and 1996, have positioned themselves as the biggest group of homebuyers, beating both Baby Boomers and Gen Z,” SmartAsset wrote in its report, citing data from the National Association of Realtors.
The Phoenix housing market has been beneficial for buyers this year, with the median price of new homes dropping to $469,017 at the end of June, down from $479,296 the year before, according to previous Business Journal reporting.
The only metro areas with more millennials buying homes than Phoenix were Raleigh, North Carolina (6.5%), Nashville, Tennessee (6%), Denver, Colorado (5.9%), Charlotte, North Carolina (5.8%), and Indianapolis (5.6%), approximately.
No. 7 Jacksonville, Florida had a 5.4% rate of millennials buying homes, but there were less than a third as many millennials there compared to Phoenix, even though they make up 27.3% of Jacksonville’s population. The top 10 also included Virginia Beach, Virginia (5.2%); Cincinnati, Ohio (5.2%); and Austin, Texas (5.1%).
After Phoenix and Denver, the next highest cities in the Western U.S. were Portland, Oregon (No. 20), Sacramento, California (No. 22), and Las Vegas, Nevada (No. 25). Most of the other cities in the top 25 were from the South and Midwest regions.
At the bottom of the list was the San Francisco-Oakland-Berkley metro, where less than 1% of millennials took out mortgages. In that metro, the median property value was $1.58 million, and the median income for millennials was $300,000.
Arizona can expect to see fluctuations in the real estate market and purchasing power as we progress into future development.
