Millennials should look for shorter commute times, good public schools and affordable homes
The St. Louis suburb of Brentwood ranked as the best place for this cohort who are, for the most part, first-time home buyers to buy a home in the U.S., according to ranking by online real estate investment management firm HomeUnion. Not to be confused with its more famous Californian counterpart, Missouri’s Brentwood had roughly 8,055 residents as of the 2010 Census and sits on just two square miles of land. The city is located in St. Louis’ inner ring of suburbs, less than 10 miles from the larger city’s downtown.
A median home in Brentwood last month hovered at around $178,700, down 4.5% on last year, according to the real-estate website Zillow, less than the median U.,S. home price of 196,500. The house price increases have been greater in older and urban neighborhoods that draw millennials, and weaker in areas hit by the property crash 10 years ago.
To produce its ranking, HomeUnion picked cities based on criteria including affordability and how many public schools fell within the 80th percentile based on grades. The company then ranked the cities by their average commute time from shortest to longest. In Brentwood, the average monthly mortgage payment is $1,169, and 87% of the public schools were in the 80th percentile for Missouri. The average commute time there was 30 minutes.
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Other places that ranked in HomeUnion’s top ten places to buy include Boca Raton, Fla., the Pittsburgh suburb of Mount Lebanon, Pa., the Cleveland suburb of Chesterland, Ohio, and the Oklahoma City suburb of Edmond, Okla. The cities, which were spread out across the country, generally had one factor in common: their suburban locations.
HomeUnion geared its analysis toward the wants and needs of millennials who are buying their first home. A large cohort of young adults now falls between the ages of 25 and 34, which includes the average marrying and parenthood ages. Mortgage affordability and having strong public schools become especially important given the higher student loan burden these individuals face, according to Steve Hovland, HomeUnion’s director of research and communications.
At the same time, this cohort has grown accustomed to a different lifestyle than other generations, reflecting the desire to be close to work and home, Hovland said. “One thing millennials love is to be in these live-work-play environments,” Hovland said. “Long commutes aren’t something millennials are used to.”
That same interest in a healthy life balance has fueled the development of “apartment cities” in and around employment centers in popular metropolitan hubs like San Francisco, Los Angeles and New York. This construction boom, along with low interest rates, has helped to drive home prices up in many of these cities, pricing many young adults out of these markets.
While these popular cities may not be as well-suited to millennials’ needs, wages are often higher in them. The annual mean wage in the St. Louis metropolitan area is $48,240, versus $69,110 in San Francisco and $61,790 in the Greater New York Area. Also, some of the more popular cities are hubs for industries like health care and technology, which could make them abetter choice for job-seekers than the suburban locales on HomeUnion’s list.
Paying attention to factors like affordability and the proximity of good schools could prove to be a smart long-term strategy for young Americans, Hovland said. “A lot of millennials don’t plan on having kids until much later in life,” he said. “But it’s great for reselling your property when you’re moving to your next home.”