Despite a recent slide in homeownership in the wake of soaring prices, millennials are starting to buck the trend and buy homes rather than rent in some U.S. cities, according to New York-based personal finance website SmartAsset.
The company found wide discrepancies by analyzing U.S. Census Bureau data and then ranking cities according to the under-35 homeownership rate in 2015 and comparing the change in this category's rate between 2006 and 2015. The homeownership rate for millennials in Elk Grove, CA was at 60% in 2015 compared to levels as low as 11% in cities like Orlando, FL, and Cleveland.
The Northeast fared the worst, while Sacramento and smaller cities close to its metropolitan area like Elk Grove and Roseville are some of the top places in the country for millennial homeownership.
The report by SmartAsset reported that Sioux Falls, SD actually topped the list of where millennials are buying homes and reported homeownership among young adults rising from 40.4% in 2006 to 45% in 2015. Huntsville, AL, rounded out the bottom of the list's top 25 with a 24.87% homeownership rate for millennials in 2015, up slightly from 23.45% in 2006.
SmartAsset noted that overall millennial homeownership rates plummeted from 40% in 2006 to 32% in 2015.
The trend comes as younger, first-time buyers continue to face barriers to entry into the housing market as luxury price tags, sky-high rents and student loan debt complicates their ability to find enough money for a downpayment.
However, SmartAsset's findings that certain cities are seeing a pick up in millennials entering the market dovetail with other recent data, suggesting that the recent trend away from ownership is set to reverse slowly as employment opportunities grow, wage levels improve and greater supply streams in.
National Association of Realtors reported in November that first-time, typically younger buyers accounted for 35% of home sales this year, up from 32% in 2015 and the highest share since 2013.
This shift followed real-estate listing website Realtor.com in an October report that found individuals aged 25 to 34 accounted for one-third of homebuyers in September 2016. Redfin also noted that modest price growth in September helped entry-level buyers looking to purchase a property.