A little over 39% of millennials in the Denver metro area are homeowners, a rate that puts the Mile High City in the middle of the pack of the 53 largest U.S. urban areas and consistent with the national rate.
The Denver-Aurora-Lakewood ranking of No. 24 among metros with more than a million people comes in a new analysis from home improvement services website Porch.
The report cited U.S. Census Bureau data showing the national homeownership rate among millennials clocks in a 39.5% compared with the overall national homeownership rate of 63.9%.
Factors contributing to the low rate among millennials include a propensity to delay marriage, increased student loan debt, lack of affordable housing and geographic preferences, according to the analysis, which referenced research from the Urban Institute. Nationally, Porch’s analysis found the highest rates of millennial homeownership were found in metros that had lower cost of living than average and higher average earnings, making the homes more affordable.
In the Denver metro, the report found the median home price was $448,001 and the median mortgage payment was $1,589 per month. Denver’s median earnings for millennials with full-time jobs are $47,300.
The report put Denver's cost of living at 5% above the national average for large cities. Also, the report found small and midsize metro areas, particularly in the Midwest, tended to have higher millennial homeownership rates than in larger cities. In the smaller two metro categories, median homeownership rates were higher than 41% compared with the large metro rate of 36.4%.
“Recent evidence shows that millennials are fleeing large, more expensive cities for more affordable, smaller locales,” the analysis said. “While millennials helped boost urban growth after the Great Recession, in recent years, the population of older millennials and younger Gen Xers has declined in these cities. “
The Covid-19 pandemic may continue to fuel this trend as dense city living becomes less attractive. Additionally, the economic and financial uncertainty that many Americans now face will make buying a home in pricey, large cities less feasible.
Colorado Springs had a 43.7% rate of millennials owning homes, with a lower median home price ($333,121), lower average monthly mortgage payment ($1,182) and lower median earnings rate ($39,000) than Denver. In Fort Collins, the millennial homeownership rate is lower than Denver's, at 34.9%. Millennials in the report were defined as those born from 1981 to 1996; cost of living data came from the Bureau of Economic Analysis’ Regional Price Parity report and home price information came from the Zillow Home Value Index.
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