San Jose Leads the Nation in Millennial Homebuyers

While there is a popular assumption that millennials have indefinitely moved into mom and dad’s basement, they makeup the largest share of homebuyers in the United States, according to a recent report by Lending Tree. And San Jose led the country for the largest share of potential millennial homebuyers.

According to the report, 63.6 percent of mortgages offered in the San Jose market were to millennials. Denver and Boston rounded out the top three markets with 61.3 and 61 percent, respectively. San Francisco was ranked sixth with 59.1% percent.

Nationally millennials make up 52.9 percent of potential homebuyers in the 50 largest cities, Lending Tree found. This is up from 25 percent from a 2019 report by the mortgage platform.

Both San Jose and San Francisco were outliers in terms of average down payments for a home. San Jose homebuyers put down an average of $145,000, while those in San Francisco put down $139,000. The next largest contenders were Los Angeles and Seattle with $105,000 and $101,000, respectively.

The two largest cities in the Bay Area had the highest average credit scores with 751 and 750. However, they did have some of the highest average age of potential buyers: 33 years old for San Jose and 33.4 for San Francisco; a majority of others in the top 10 were below 33 years of age.

Millennials are at the point in their lives when buying homes makes sense, while older generations have less incentive to purchase new homes.

“Many millennials are at an age where they’re starting families and earning more money,” the report said. “This means they not only have more of a financial ability to become homeowners, but they’re incentivized by reasons like needing to provide for their loved ones in a way they may not have been when more of them were in their 20s. Millennials are certainly not as financially well-off as older generations, they’re at a place where buying often makes the most sense.”