Real Estate Rumblings

Houston lands among the most popular metros for millennial homebuyers

Millennials make up the majority of homebuyers in Houston, according to a new report.

Getty Images/Courtney K

Millennials now make up the largest group of homebuyers in the U.S., and are choosing to lay down roots in big cities and up-and-coming metropolises versus suburbs and small towns.

In a January 6 report, online marketplace LendingTree ranked the 50 most popular metro areas for millennials. Houston lands right in the middle at No. 26.

To determine the rankings, LendingTree analyzed mortgage purchase requests made on their own platform across the nation, beginning January 1 through December 15, 2020.

Though less wealthier than their Baby Boomer and Gen X counterparts, LendingTree points to the current record-low mortgage rates spurred by the pandemic as a reason for the new swath of millennials looking to buy a home.

"What LendingTree [also] found was that millennials (defined as anyone born between 1981 and 1996) make up a majority of potential homebuyers in most of the country’s largest metros," the report says. "Location is typically a primary factor to consider when buying a home, but the pandemic has affected many aspects of the U.S. economy including various industries and local job markets."

Millennials make up 53.77 percent of people looking to purchase a home in the Bayou City, and boast an average age of 31 years, 7 months and a credit score of 660. When it comes to financing, young homebuyers bring an average downpayment of $34,361 and borrow $231,300.

That's well behind Austin, which takes eighth place on the list. Despite a crippled hospitality industry, the Central Texas job market is still considered strong, and the city drew even more attention in 2020 as a cavalry of California-based celebrities decamped to Austin.

Millennials make up 57.34 percent of homebuyers in the Capital City with an average age for a potential buyer of 31 years, 4 months and an average credit score of 687. When it comes to purchase power, Austin homebuyers bring an average of $47,940 as downpayment, and borrow an average of $288,461.

Right behind Houston is Dallas at No. 28. Millennials account for 53.7 percent of homebuyers in Big D, and have an average age of 31 years, 6 months. Millennial buyers bring an average downpayment of $34,815 and borrow $245,355 to finance their investment, says LendingTree.

San Antonio is the fourth and final Texas city in LendingTree's report. At No. 34, millennials make up 51.46 percent of homebuyers in the Alamo City, and have an average age of 31 years, 7 months. As for financing, buyers typically bring $25,867 and finance an average of $203,710.

Rounding out to the top 10 largest metros ranked by millennial popularity: San Jose, California (No. 1); Boston (No. 2); Denver (No. 3); Minneapolis (No. 4); Buffalo, New York (No. 5); San Francisco (No. 6); Salt Lake City (No. 7); Pittsburgh, Pennsylvania (No. 9); and New York City (No. 10).

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Rent report

This Houston suburb had the highest apartment rent prices in June

The City of Sugar Land, Texas – City Government/Facebook

The asking rent for a one-bedroom apartment in Sugar Land was $1,450 in June, and two-bedroom units were $1,870.

Apartment rent prices in June were more expensive in Sugar Land than they were anywhere else in Houston, according to the latest monthly rental report from Zumper.

The rent report, which analyzed active listings from the previous month across all cities in the Houston metro, tracks the most and least expensive rent prices for one- and two-bedroom apartments, and determines the cities with the fastest growing rents. Listings were aggregated by city to calculate median asking rents.

Despite having the most expensive rent in the Houston area last month, the asking rent for one--bedroom apartments in Sugar Land was technically lower than it was a year ago. Sugar Land's asking rent for one-bedrooms dropped 0.7 percent year-over-year to $1,450, while asking prices for two-bedroom units grew 3.3 percent to $1,870.

Galveston saw the highest jump in one-bedroom prices year-over-year this past June, with asking rent for single-bedroom units rising 2.7 percent to $1,140. Two-bedroom apartments in Galveston dropped 2 percent year-over-year to $1,450.

One-bedroom rent in Pearland decreased 1.5 percent to $1,340 in June, which Zumper found was the second-highest rent price in Houston. Year-over-year prices for two-bedroom units rose nearly 3 percent to $1,770.

Houston proper had the third most expensive rent in the metro area last month, with prices for one-bedroom units remaining flat year-over-year at $1,280, while two-bedroom units decreased 7.4 percent to $1,500.

Houston-area cities with affordable rent compared to the statewide median
Zumper's report revealed that the median asking rent for a one-bedroom apartment in Texas came out to $1,134 last month, but there was no figure given for two-bedroom units.

Out of the 13 Houston-area cities included in the report, six had affordable asking rent prices lower than the statewide median: Huntsville ($850), Pasadena ($900), Texas City ($910), Lake Jackson ($920), Baytown ($940), and La Porte ($1,100).

Huntsville rent prices were the cheapest in the metro last month, but rent in Baytown decreased the most dramatically since last year with prices plunging 14.5 percent. Huntsville's current asking price is 5.6 percent lower than it was this time last year, which was the second-lowest drop.

These are the June rent prices for one-bedroom apartments in the three remaining Houston-area cities:

League City – $1,200
Spring – $1,180
Conroe – $1,150

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