Despite the obstacles of student loan debt and rising home prices, young buyers still have a feasible path to homeownership. In fact, a national study recently named Salt Lake and Ogden as two of the top areas for buyers under 35.
The National Association of Realtors studied employment growth, population trends, incomes and housing conditions in the nation’s 100 largest metropolitan statistical areas to identify the best places for millennials who are buying their first homes. The report defines millennials as buyers under 35 years old.
“Even with potentially higher incomes, prospective millennial homebuyers residing in some of the most expensive cities in the country face the onerous task of paying steep rents while trying to save for an adequate down payment,” said Lawrence Yun, chief economist of the National Association of Realtors. “However, for those currently living in or looking to move to a more affordable part of the country, there are metro areas right now with solid job growth and that offer a smoother path to homeownership.”
Ogden is one such area. The city made the top 10 list because of its strong employment, high wages and affordable housing. Of the metros listed, Ogden had the lowest income requirements for qualifying on a loan yet had one of the highest median household incomes.
“An overwhelming majority of young renters recently said they eventually want to buy a home,” Yun said. “As long as new and existing-home supply keeps up to meet demand and holds prices from rising too quickly, these identified areas are poised to lead the way in helping millennials realize their American Dream of becoming a homeowner.”
The report gave points to Ogden for having a high homeownership rate among millennial movers. At 40 percent, this was the highest of all 100 metro areas studied. Employment also grew three times as much as it did nationwide.
“Ogden is a small metro area which has one of the best combinations of low home prices and a relatively high median household income,” the report said. “Millennials choose to live and move in the area where houses are affordable and job growth has been tremendous.”
It’s no surprise that Ogden has received this national recognition. Historically, the Ogden-Clearfield metro area ranks as one of the most affordable areas in the country. In the National Association of Home Builders’ most recent Housing Opportunity Index, Ogden ranked as the most affordable area in Utah and No. 5 regionally.
Of all Ogden-area homes sold, 85 percent would be affordable to a family making the median income. That’s in contrast to areas like San Francisco where only 10 percent of homes would be attainable.
Although not quite as affordable as Ogden, Salt Lake also made the Realtors’ list of Top Purchase Markets for Millennial Buyers because of strong job growth and a high percentage of young movers.
During a recent presentation, Yun told Realtors many people are moving from expensive markets, such as the Silicon Valley, to more affordable markets like Salt Lake and Denver (also on the list) that have had a surge in high-tech jobs.
“During the early stages of the economic recovery, some of the largest metro areas — such as New York and parts of California — were attractive to millennials for their strong job markets, but their higher costs of living made it difficult to buy,” the report said. “Now that many more affordable, middle-tier cities have mostly recovered from the downturn and are once again experiencing robust job growth, millennials moving to some of these cities will likely realize they’re earning enough to purchase their first home.”
Would-be buyers can learn more about purchasing that first home by contacting a local Realtor. A directory of Realtors specializing in Northern Utah is available at NWAOR.com.
– Jed Nilson
2016 President, Northern Wasatch Association of REALTORS