Source: RISMedia —
With a record number of millennials set to reach key age milestones for homebuyers over the next two years, experts say this could push already accelerated price gains even further. This, according to a new report from Zillow that found home values are growing fastest in areas with the highest share of kids, reflects the impact millennial house hunters are making on family-friendly neighborhoods already experiencing a shortage of homes for sale.
According to the report, the top 10% of ZIP codes with the largest share of kids in each county analyzed saw an average of 21.3% growth from October 2020 to October 2021, compared to 17.6% in ZIP codes with the smallest share of kids. This trend started in 2013, which, not coincidentally, was the year the oldest millennials turned 32, the age when many new parents buy their first homes. That’s the median age of first-time home buyers and one year older than the median age of fathers with newborns, Zillow’s report stated.
“As millennials go, so goes the housing market, and we are seeing now, as millennials age, that they are looking for homes that fit the needs of growing families,” said Zillow economist Nicole Bachaud. “Millennial demand has helped push up home prices in areas with the most children. Competition for homes in these family-friendly areas should intensify in the coming years as more millennials reach the key age of 32, adding to the affordability squeeze.”
Zillow’s report analyzed 421 U.S. counties, representing 71% of the country’s population. ZIP codes with more residents under 18 years old are associated with higher home value growth in nearly two-thirds of the counties studied. Many of the counties where this relationship does not hold true are vacation destinations, where part-time residents have unconventional housing demands. Home value growth in these family-friendly areas began to outpace nearby ZIP codes in 2013, and the correlation between kids and home value growth has been nearly perfect for each year since 2017, according to the report.