Rising home prices and student debt reduced home ownership for younger adults in more than 90 percent of major U.S. cities over the past decade, but not in Chattanooga.
Among the 200 largest U.S. cities, Chattanooga was one of only 18 cities that showed a gain in the share of those age 35 and younger who owned their own home in 2016 compared with the share of home owners in that age group a decade earlier.
A new analysis of census data by the online financial information web site SmartAsset found that 28.05 percent of millennials in Chattanooga owned their own home in 2016, up from 26.27 percent in 2007.
Home ownership among those 35 years old and younger in Chattanooga was still below the U.S. average of 34.7 percent in 2016. But Chattanooga showed improvement in home ownership for millennials while the U.S. as a whole dropped by 7.3 percentage points from the 41 percent share of home owners for millennials recorded in 2007 before the Great Recession.
Millennials have been less likely to buy homes due to both economic and demographic reasons. More adults are marrying and having children at older ages than in the past and many young adults are taking on heavier student debt burdens to get their college degrees and are less able or willing to take on the additional debt of a home purchase.
"It will be interesting to see as Millennials get older if that home ownership rate moves up to more historically normal levels or not," said AJ Smith, vice president of financial education at SmartAssets who analyzed the home ownership data for the top U.S. cities. "
Most of the cities showing gains in the past decade were in mid-sized cities with more moderately priced homes compared with the more expensive median home price in major U.S. cities. Chattanooga's median home price last year was nearly 30 percent below the U.S. average, according to the National Association of Realtors.
Smith said seven of the 10 largest cities in the United States ranked in the bottom half of cities for the growth of millennial home ownership rates in the past decade.
"We certainly saw that the biggest cities in the country did pretty poorly when it came to millennial home ownership," she said.