Aldo Svaldi wrote a great story for the Denver Post on Sunday that Denver is still a magnet for Millennials. In 2017, 65% of metro Denver’s out-of-state movers into Denver were Millennials, tied for 6th highest rate in the country. But, only 10% of recent Millennial movers purchased a home here. In Denver metro Millennials make up nearly 30% of our population and they account for about 2/3 of all transplants.
NAR studied the 100 largest metro areas and Millennials earned a median salary of $55,609 across the country; but here in Denver they are earning a median salary of $69,300. However, for the Millennials who moved here, their median salary is just $55,600 versus $52,765 nationally. This last stat really surprises me as I have not seen this reported anywhere else.
According to NAR Millennials who earn the median income can only afford to buy 6% of the homes for sale in March in metro Denver. Nationally, the affordability ratio is 23%. But, if 2 of them buy a home together the percentage would really increase. Is this any different from the 2 previous generations though? I believe many Gen Xers and Boomers needed 2 incomes to buy their first homes as well.
In his story Aldo highlighted a young CO couple who recently moved back to Denver from Houston; but they had to take small pay cuts to move back. Why? It seems that there are too many Millennials vying for the same jobs, thus decreasing wages. This is supply and demand at work. At the same time builders are “light years” behind in providing supply of new affordable homes and home prices have soared.
We have a huge supply problem with new housing partially because so few Millennials are willing to work in construction as the NAHB discovered 2 years ago in a landmark survey, in which they found only 3% of young Millennials want to work in construction. For the last 25 years or so our society has looked down upon blue-collar workers and now we are paying a price as we don’t have enough blue-collar workers.