Map Shows 12 States With Youngest Homebuyers

Young Americans desperate to buy a property might have better luck if they broaden their horizons, according to a Newsweek map showing areas with the most homeowners under the age of 34.

The picture might seem bleak as mortgage rates remain sky high and a nationwide shortage of homes continues.

But a report from Agent Advice shows which states top the list when it came to their population of youngest homeowners. North Dakota took first place, with 4.9 percent of its population being homeowners between the ages of 15 and 34, according to the U.S. Census Bureau.

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Among its 215,896 total homeowners, 38,182 were between the ages of 15 and 34.

Next in line were Iowa and South Dakota, which also both had more than 4 percent of their overall population designated as young homeowners.

The top 12 list was as follows: North Dakota (4.9 percent), Iowa (4.32 percent), South Dakota (4.16 percent), Indiana (3.87 percent), Minnesota (3.86 percent), Wyoming (3.79 percent), Utah (3.72 percent), Michigan, Kansas and Kentucky (tied at 3.61 percent), Nebraska (3.56 percent) and Colorado (3.47 percent).

"It's great to see more and more young people on the property ladder across the US," Agent Advice's co-founder Chris Heller said in a statement. "The leading states are perhaps attracting younger homeowners due to affordable prices, job opportunities, and lifestyle preferences."

Not all states fared as well, though, with high cost of living states Hawaii (1.49 percent), California (1.58 percent), New York (1.92 percent) and New Jersey (2.15 percent) seeing the lowest percentage of young homeowners.

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A recent Bankrate study found a buyer needs nearly $197,057 in annual income to qualify for a mortgage on a median-priced home in California, and the housing market is similarly challenging in many other high cost of living cities and states.

And as the national housing market remains more and more competitive, Alan Chang, the founder and president of Vested Title & Escrow, said it makes sense that younger homeowners are drawn to more affordable locales.

"These states are not surprising at all since home affordability has been at an all-time low," Chang told Newsweek. "It is only logical that first time homeowners are looking at some of the markets that rose the least in the recent years."

States with the smallest number of young homeowners tended to be those who saw the most severe increases in property values from 2020 onwards. Because of the larger down payment and monthly mortgage bills involved, many younger Americans have been entirely priced out.

"Desirability of states like New York, California and Hawaii drives competition which increases prices to a point where they are out of reach for most first-time buyers," Alisha Penn, a Detroit-based real estate agent at Keller Williams, told Newsweek.

Penn said compared to their parents, younger people enter the housing market with more debt, often in the form of student loans. They also feel less security about making the leap into buying.

Chang said the pandemic has only exacerbated the issue, and lower cost of living areas became more competitive.

"Mid-pandemic, a large portion of the workforce relocated to more affordable parts of the country when remote work was adopted early on," Chang said. "With remote work losing some of its popularity amongst companies now, it might begin to even out slightly, although the workforce continues to push back on the legacy concept."