A new report on The Exchange on CNBC revealed that while the rate of millennial moving to the suburbs isn’t new, what they’re looking for once they get there has changed.
“They want close knit, they want walkable, and they want they want it around smaller cities,” Diana Olick of CNBC.
Olick added that suburbs around smaller cities will need to expand to accommodate the growing demand for these communities.
The report by CNBC stated that 175 million people now live in suburbs or in smaller metros, opposed to just 98 million who live in a “urban core.” Forty-six million people reside in rural areas of the country.
Valerie Bauerlein of the Wall Street Journal added that this is a stark contrast from a decade ago when people wanted to live closer to the cities. The current trend, she said, is for millennial to “flock to the suburbs,” as many of them, now between the ages of 23-38, can afford a house and start a family.
Bauerlein also added millennial are very selective to were they move, as it must have good weather and good job opportunities.
And it is millennials that are beginning to reshape the housing market, as a report last month by Genworth Mortgage Insurance revealed that first-time buyers make up 38% of single-family homebuyers and 57% of new purchase borrowers.
“First-time homebuyers are typically different from other homebuyers, having less income and savings, but also are more likely to buy because they are starting a family versus changing jobs, retiring, or upgrading their home,” said Genworth Chief Economist Tian Liu. “For these reasons, the first-time homebuyer market and the rest of the housing market do not necessarily move together. Since 2014, home sales to first-time homebuyers have accounted for most of the growth while sales to repeat buyers have been largely flat.”
Genworth notes that since 2014, first-time buyers have been the biggest contributors to home sales growth, while sales to repeat buyers has remained relatively flat. According to the study, the steady surge in first time homebuyers is due to both cyclical and demographic forces.