Op-Ed: Home prices are going through the roof. Millennials piling into the market is one big driver

For months now, my friends who are millennials have struggled to find single-family homes on the market in the suburbs, exurbs and even in rural areas — and when they do, they face daunting bidding wars.

Millennials are leaving the city in droves as urban centers like New York and San Francisco see their populations decline. At the same time, the COVID-19 pandemic has resulted in a housing shortage and skyrocketing prices, with “feeding frenzies” for houses, notably outside major urban centers. Millennials (age 25-40) are part of this dynamic, seeking to make their lives outside of cities and to own their own homes rather than rent.

The notion that millennials want to settle down outside of cities is jarring for many. For years, millennials were considered the “urban” generation, with tendencies to value “experiences” over “things” and having less interest in homeownership. These accounts suggested that millennials were very different from baby boomers and the Gen Xers.

While this characterization of millennials might have been correct a few years ago, new data suggest that is becoming less true. A recent poll by the Los Angeles Times and Reality Check Insights reveals that cities are becoming less appealing for most Americans — with dreams of lush lawns and open skies being ascendant even for millennials.

Today, 38% of Americans would move to a small town or rural area if they could pick anywhere to live in the country. Around 33% would opt to move to a suburb of some sort, and just 24% would want to live in a city.

The numbers look a bit different for millennials, but their hearts and minds are not necessarily downtown. A significant number of younger Americans, 26%, would like to end up in small-town or rural America. Another 39% of millennials want to head for the suburbs, and 33% would be interested in living in cities. Younger millennials presumably need to be near cities for work and social connections, while older millennials may find the suburbs appealing as they consider the needs of their growing families.

Indeed, close to 40% of millennials who currently live in cities say they would leave if they could, compared with just 24% of millennials who live in suburbs and express an interest in moving elsewhere.

Married millennials are even more likely to want to move to the country — 31% compared with 21% for singles. (This is understandable since cities have long been places where unmarried adults meet future partners.) A quarter of families — both with and without children under 18 — say they would like to move to rural America. Having children doesn’t seem to drive the move to rural areas. But children do appear to push families to move to the suburbs: Millennial parents would prefer to live in suburbs versus cities by a ratio of 2 to 1.

When millennials think about leaving cities, attention shifts from dense, often rented, apartment-based living to lawns, space and single-family homes. The data show that 55% of millennials believe owning a home is essential to realizing the American Dream. Homeownership is so valued by millennials that is it deemed more important than becoming wealthy or being better off than one’s parents.

The COVID-19 era is causing more millennials to reconsider city living, as working remotely allows them greater flexibility to move out of metro centers. Many say homeownership matters, despite rising home prices and bidding wars for dwindling supply in many parts of the country.

Before the pandemic, the media focused on urban millennials and their “sharing economy” and “friendship group”-based lifestyles in places like Los Angeles and New York. Reports portraying millennials as being very different from their parents and grandparents in housing and life choices seem to have misunderstood them, particularly as they age.

Of course, some millennials are buying city lofts and settling into dense urban neighborhoods (if they can afford the prices and rents), but a shift is happening. Many are now moving to the suburbs, and with marriage and parenthood, they are pushing up housing prices as they seek to own their homes, too.

Samuel J. Abrams is professor of politics at Sarah Lawrence College and a visiting scholar at the American Enterprise Institute.