Why Are Millennials Buying So Many Houses In Des Moines?
RENEE MONTAGNE, HOST:
First time home buying is still down since the recession. Though, it now appears millennials are starting to move out of apartments and their parents basements. One place millennials are buying a majority of the houses is Des Moines. Iowa Public Radio's Sarah Boden reports.
SARAH BODEN, BYLINE: Dani Ausen is a 33-year-old graphic designer and jewelry maker in Des Moines. She and her husband, Ken, bought their home about three years ago. The first-time buyers paid less than 160,000 for a ranch-style house not far from downtown. The three-bedroom wasn't a fixer-upper or in a transitional neighborhood. Ausen even liked the interior's bold paint colors of orange, red and dark turquoise.
DANI AUSEN: That actually kind of sold the house to me a little bit (laughter). Seeing it not, like, painted all white or beige was very helpful.
BODEN: Locally produced artwork and musical instruments fill the walls. There are also a lot of skulls.
AUSEN: People always ask me if it's a morbid thing. And I just really like how they look, so I kind of tend to buy a lot of home decor in the month of October and then just leave it up all year (laughter).
BODEN: Ausen says she feels very lucky to own a house. And in central Iowa, she has lots of company these days. Fifty-nine percent of borrowers here who used a mortgage to buy a home in this year were between the ages of 25 and 34. That far outpaces the national average of 37 percent. That data comes from realtor.com. The website's chief economist, Jonathan Smoke, says this is partly because housing in Des Moines is relatively cheap for both buyers and renters.
JONATHAN SMOKE: If you're in a scenario where you're spending 25, 30 or even more, higher percentage of your income on rent, you're not going to be in a good position to save for that down payment.
BODEN: Additionally, Des Moines attracts an educated workforce because of its strong insurance and financial sectors. Elora Raymond does research for the Federal Reserve Bank of Atlanta. She says while home buying is still down since the recession, the median age of first-time homebuyers actually skews slightly younger.
ELORA RAYMOND: And that's because the youngest first-time homebuyers also have the strongest credit.
BODEN: Yes, millennials have a lot of student debt. But they don't have much other debt, from credit cards or car loans. In fact, survey data suggests millennials aren't big drivers. Raymond says while the majority still buy in the suburbs, more and more young adults are buying in locations where cars are less necessary.
RAYMOND: And we confirmed that overall, millennials are buying about a mile closer in, on average, than older first-time homebuyers and also closer than existing homeowners, younger and older.
BODEN: Suburban-Des Moines-based Hubbell Realty says it's having its best year ever. Vice President Rachel Flint attributes this partly to millennials who really want to live downtown.
RACHEL FLINT: They want to walk places. They want to go places and not have to worry about driving their car.
BODEN: Flint is showing off 26 new townhouses near Des Moines sculpture garden and says about half the units have already been sold to young professionals. So where were all these millennials living before moving into swanky townhouses?
FLINT: They were living in apartments with their friends, or they were living in their parents' basements. And they were taking their time until the moment was right for them.
BODEN: For cities that would like to attract millennial homebuyers at the same rate as Des Moines, it appears good jobs and affordable housing must be in the mix. But to really coax frugal 20 and 30-somethings into home ownership, it's best to develop housing near a city center. For NPR News, I'm Sarah Boden in Des Moines.
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