It used to be that most city-dwelling millennials wouldn’t consider moving to the suburbs, at least not until the later stages of life.
But a growing number of millennial first-time homebuyers (those aged 25-34) are now making the move in order to find—and be able to afford—their perfect home, according to TD’s Spring Homebuying Survey.
Of the 8 in 10 millennials who aspire to own their own home, the survey found that two-thirds are willing to forego the conveniences of city living in exchange for a home that meets their needs.
“We’re now seeing millennials looking beyond the city for their housing needs, particularly as they start thinking about their needs for the future, like having more space to raise a family,” Pat Giles, Vice President, Real Estate Secured Lending at TD, said in a release. “As a result, many are choosing the suburbs to either make the move to a new home or upsize from their current one, a shift from just a few years ago when city living was this generation’s preference.”
Four years ago, the same survey found that 38% of millennials preferred to live in the city vs. 33% today.
The number one driver of this shifting trend is affordability, with 64% of respondents citing high home prices as the reason for house hunting beyond the city limits. Other factors include increased outdoor space (63%) and larger living areas (62%).
While buying a home in the suburbs may offer improved affordability, it does come with its own costs, both in terms of access to amenities and increased commute times. But most millennial buyers say they’re ok with that and willing to make the sacrifice.
More than half (58%) said they are willing to eat out less, while 56% would cut down on shopping and 50% would reduce their entertainment spend.
Extended commutes are less appealing, however. Only 27% said they would be willing to spend more time travelling to and from work, with 45% saying the ability to live close to work is a key purchasing factor.
Similar Trend in the U.S.
This latest data comes on the heels of a Wall Street Journal piece that explored a similar trend taking place across the U.S.
“Rising mortgage rates and home prices, especially in urban centers, are once again motivating buyers to drive until they can afford a home,” reporter Laura Kusisto wrote.
The research found millennial homebuyers are most likely to seek homes in the the suburbs or beyond (an area referred to as the “exurbs”). On average, these homes are located more than 25 kilometres from central business districts.
In recent years millennials have been largely responsible for driving demand of rental apartments in downtown areas, a trend many thought would continue.
“And yet, as they begin to marry and have children, millennials are proving like generations before them that they are willing to move to more affordable outlying areas,” Kusisto wrote.