Millennial Homebuyers Drive Hottest ZIP Codes in America Report
Santa Clara, Calif. -- Realtor.com recently announced its fourth annual list of the Hottest ZIP Codes in America. The new list shows high-income millennials are helping to drive a nearly 10% increase in how fast homes are sold in the most popular areas of the country, which spans emerging suburban areas near Silicon Valley, throughout the Midwest, and on the East Coast.
As millennials get older, move out on their own and buy homes, they are driving demand for homes in smaller, more suburban locales. Some of the new areas making this year's list include: Kentwood, Mich. (49508); Peabody, Mass. (01960); Boise, Idaho (83704); Rochester, N.Y. (14624); and Upper Montclair, N.J. (07043).
"When it comes to choosing a home of their own, millennials are looking for opportunity and they're finding it in affordable suburbs," said Danielle Hale, chief economist for realtor.com. "These hot housing markets are attracting the attention of hard-working, high-earning 25-to-34-year-olds who are drawn by their relative affordability, strong local economies, and outdoor and cultural amenities."
Realtor.com analyzed 32,000 ZIP codes based on the time it takes properties to sell and how frequently homes are viewed in each ZIP code on realtor.com. One ZIP code was included per metro area. Homes in this year's top 10 hottest markets sell in an average of 20 days, 46 days faster than the rest of the country, 25 days faster than their respective metro areas, and 18 days faster than their respective counties.
Realtor.com users view homes in these markets four times more often than homes in the rest of the country, 2.3 times more often than their respective metro areas, and 1.9 times more often than their respective counties. The average views per property for these 10 ZIPs on realtor.com are up 14% compared to last year. In addition, home list prices in 9 of the 10 markets are appreciating on a yearly basis, and in some cases they're doing so rapidly. Five of the 10 ZIPs saw double-digit growth in asking prices, faster than the national rate of 8.4%.
Homes in the listed ZIP codes are relatively affordable. The median price for a home in these markets is $358,000, and top markets are almost all more affordable than their surrounding area. Five of the top 10 ZIPs have median listing prices that are lower than the U.S. overall and 8 have prices that are lower than their respective metro and county areas.
Residents of these areas are employed at higher rates and tend to earn more. Household incomes in 8 of the top 10 ZIPs are greater than the national median of $61,000. In total, the average household income in the top 10 ZIPs is $83,000. The 10 ZIP codes are also located in counties with an average unemployment rate of 3.6%, which is 30 basis points lower than the U.S. unemployment rate.
Millennials, in particular, are doing well. In 8 out of the top 10 ZIPs, the median household income for 25 to 34 year olds is 1.3 times higher than the national median at $78,000. Millennials also hold the lion share of purchases. Mortgage originations in 9 of the top 10 counties of these top 10 ZIPs are strongly dominated by millennials (25 to 34 year olds), which have a greater share of mortgage originations (34%) than the next largest group (35 to 44 year olds) with 31%.
For more information, visit www.realtor.com.