Key findings:

    • The 17 states with the largest increases in millennial homeownership are also states in the top half of most expensive median home values. Affordability isn’t driving under-35 homeownership.
    • Eight of the top 10 states for millennial homeownership are in the top half in median home value compared to outstanding mortgage debt, indicating that millennial homeownership is driven by value investment versus affordability.
    • Median home values increased by 27% from 2013 to 2019, while median income of people aged 25-34 only increased by 17%.
    • Above-average income growth from 2013 to 2019 in states with higher rates of millennial homeownership is a common factor.

With everyone curious as to what millennials are doing or not doing these days, we here at QuoteWizard wanted to see where millennials are buying, or not buying, houses. Many would assume the mound of debt millennials are under would keep them from owning homes. While there is some truth to that, we set out to find where millennial homeownership is on the rise. We looked at Census data to see which states have seen the biggest changes in millennial (under 35 years old) homeownership from 2013 to 2019. When comparing homeownership rates over the six-year period, we found that nearly half of all states saw some growth in millennial ownership, whereas the other half saw a decline. We wanted to dig in and see what is driving the growth in millennial homeownership in certain states.

The obvious theory for growth in millennial homeownership was affordable housing. States that saw growth in millennial homeownership were states that had lower median house values. Affordability was not the case in states with growth in millennial homeownership. Of the top 25 growing states, 17 were in the top half of the U.S. median house value. Millennials in fact are purchasing houses in the higher median values.

The next theory we put to the test was looking to see if median income for millennials has increased enough for them to now afford homes. Analyzing Census income data in each state from 2013 to 2019, we did see some correlation between millennial homeownership and income growth. Top homeownership states like Vermont, Massachusetts, New Jersey and Washington all saw a 20% increase in median income. States that saw a decline in millennial homeownership also saw some of the highest median income growth. To put a nationwide perspective on it, there was a 17% median income growth from 2013 to 2019, but median home values increased by 27%. Income growth doesn’t appear to outpace home values as a reason for more millennial homeownership.

millennial homeownership vs income growth

The biggest correlating factor we found to reflect millennial homeownership growth is a differential type of metric that signals quality of home investment. In 2019, Experian released a study on median home values and outstanding mortgage debts in each state. The key metric of the study was the “difference between median home value and outstanding mortgage balance.” Essentially, the resulting amount of median home value minus the average outstanding mortgage amount in each state. This differential of home value and mortgage balance in each state can be viewed as a value metric that shows a willingness to incur mortgage debt for a value investment in a home. The differential in home value and mortgage balance metric showed a strong correlation in the top growing states for millennial homeownership. Eight of the top 10 states for under-35 homeownership are in the top half in the difference of home value compared to mortgage balance. This would indicate that the significant growth in millennial homeownership some states are seeing is due in large part to a value investment in homes instead of affordability.

States like Oregon, Massachusetts and Washington are each strong examples of high growth in millennial homeownership accompanied by strong differential metrics of home value compared to mortgage balance. Conversely, states seeing a decline in millennial homeownership, like Mississippi, Kansas and Arkansas, are states with low differential metrics of home value compared to mortgage balance. These states are likely seeing declines in millennial homeownership because of low home values compared to mortgage balance differentials.

Rank State 2013 Ownership % 2019 Ownership % Ownership % Change
Difference Home Value vs. Outstanding Mortgage Debt
1 Vermont 7.9 9.5 20.3% $63,359
2 Oregon 7.8 9.3 19.2% $125,003
3 Maine 8.1 9.5 17.3% $99,246
4 Wyoming 12.8 14.7 14.8% $50,686
5 Massachusetts 7.6 8.7 14.5% $156,178
6 New Jersey 6.7 7.6 13.4% $89,711
7 Washington 9.7 10.8 11.3% $130,119
8 Tennessee 10 11.1 11.0% $13,720
9 Pennsylvania 9 9.9 10.0% $31,142
10 Florida 6.7 7.3 9.0% $49,677
11 Hawaii 5.8 6.3 8.6% $273,037
12 New York 7.5 8.1 8.0% $67,690
13 Ohio 10.1 10.9 7.9% $19,661
14 New Hampshire 8.2 8.8 7.3% $101,346
15 Michigan 10.4 11.1 6.7% $22,033
16 Rhode Island 7.8 8.2 5.1% $98,423
17 Indiana 11.8 12.4 5.1% $28,133
18 Alabama 10.2 10.7 4.9% -$7,002
19 Colorado 11.4 11.9 4.4% $122,187
20 North Carolina 9.5 9.9 4.2% $27,380
21 Alaska 12.3 12.7 3.3% $102,833
22 Idaho 11.7 12 2.6% $103,007
23 South Carolina 9.7 9.9 2.1% $10,641
24 Connecticut 7.7 7.8 1.3% $19,872
25 Virginia 9.6 9.7 1.0% $21,803
26 Missouri 11.9 12 0.8% $24,155
27 Iowa 13.2 13.3 0.8% $15,006
28 Wisconsin 10.8 10.8 0.0% $52,811
29 Georgia 9.9 9.8 -1.0% $18,414
30 Kentucky 11.1 10.9 -1.8% $21,915
31 Nevada 11 10.8 -1.8% $64,988
32 Illinois 10.3 10.1 -1.9% $7,075
33 Maryland 9.6 9.4 -2.1% $37,980
34 Nebraska 14 13.7 -2.1% $30,181
35 South Dakota 14.2 13.8 -2.8% $43,211
36 New Mexico 10 9.7 -3.0% $36,129
37 West Virginia 9.7 9.4 -3.1% -$11,464
38 Oklahoma 12.6 12.2 -3.2% -$9,411
39 Texas 11.3 10.9 -3.5% $21,976
40 Mississippi 10.1 9.7 -4.0% $8,093
41 Kansas 12.3 11.8 -4.1% $3,063
42 Minnesota 13.1 12.5 -4.6% $64,526
43 Arizona 10.1 9.6 -5.0% $54,641
44 Arkansas 11 10.4 -5.5% $117
45 North Dakota 16.4 15.5 -5.5% $47,226
46 California 8.1 7.6 -6.2% $186,909
47 Montana 10.7 10 -6.5% $61,389
48 Utah 16.3 15.2 -6.7% $134,887
49 Louisiana 12.2 11.2 -8.2% -$4,251
50 Delaware 9.8 8.9 -9.2% $50,773