Tabitha Russell, 32, a millennial, stands in front of the new home she purchased last week in Ooltewah.

Top 10 cities where millennials are buying homes

1 Sioux Falls, S.D.

2 Elk Grove, Calif.

3 Bakersfield, Calif.

4 Roseville, Calif.

5 Peoria, Ill.

6 Cary, N.C.

7 Fort Wayne, Ind.

8 Chattanooga

9 Anchorage, Alaska

10 Omaha, Neb. Source: SmartAsset



After moving to Chattanooga and renting an apartment for the past couple of years, Tabitha Russell was eager to have her own home.

"I knew it was a good investment to buy a house, and I was more than ready to have my own place and my own parking space," she said.

Last weekend, the 32-year-old applications system analyst BlueCross BlueShield of Tennessee moved into her first home — a new three-bedroom home in Ooltewah. "It feels great," she said.

Russell is among a growing number of millennials buying into the American dream of home ownership in Chattanooga. A new study of America's 200 biggest cities by the online advice service SmartAsset found that Chattanooga was one of the top 10 markets where home ownership improved in the past decade for those in their 20s and 30s.

Despite a nationwide decline in home ownership among young adults and families over the past decade, Chattanooga is one of the top cities that since 2006 have boosted the share of adults age 35 and under who own their own homes.

With the typical house in Chattanooga priced nearly 25 percent below the U.S. average, the share of young adults and families owning their own home rose from 28.9 percent in 2006 to 30.8 percent in 2015.

"Affordability is especially key for millennials," said Asees Singh, a spokesman for SmartAsset, which conducted the analysis of census and housing data to compile its study of where millennials are buying homes.

"With housing prices back on the rise, sky-high rents and more student debt for young people, those who are buying homes tend to go where housing is more affordable. Towns that are more affordable, yet still offer a lot of amenities or are close to major cities, are places that are doing better in a generation that is particularly interested in the price of housing."

A growth in jobs and income since the end of the Great Recession also has helped more young workers and families be able to purchase a home.

Singh said the top-rated cities were generally small to mid-sized cities or satellite cities to major urban towns.

Even with another 6.5 percent jump in average home prices last year, the average home sales price among houses sold last month in Chattanooga, $193,752, was still nearly 24 percent below the nationwide average of $250,000.

Young home buyers in Chattanooga also are just catching up to the rest of the country. Although home ownership among those 35 and under declined nationwide from 40 percent in 2006 to 32 percent in 2015, the share of millennials owning homes was still slightly higher in 2015 for the nation as a whole than it was in Chattanooga.

Singh said many millennials are burdened with hefty student debts and, as a whole, they are less likely to be married or making as much as their parents were at the same age.

The typical millennial is less than half as likely to own a home as the average American. Even with the recent gains, fewer than one of every three adults under age 35 own their own home in Chattanooga, according to SmartAsset.

Home ownership is even less in many major markets where home prices are much higher than they are in Chattanooga.

Over the past decade, the home ownership rate among young adults fell in all but one of America's 25 largest cities, Singh said. In Boston, it remained unchanged at 16 percent, less than half the U.S. average. In several cities, including Portland, Denver and San Jose, it fell by more than 10 percent.

Affordability is key. In eight of the top 10 cities where the home ownership rate among young adults has increased the most in the past decade, including Chattanooga, the median home value is lower than the national median.

"Chattanooga is definitely a much more affordable city," said Jay Bell, president of Bell Development Co., which developed Hamilton on Hunter where Russell bought her new home. "We are seeing more millennial home buyers and that will obviously increase as they grow older, start their own families and make more money, especially if our economy continues to improve."

Mark Hite, president of the Greater Chattanooga Association of Realtors, said millennials are now the biggest share of the population and will soon comprise the biggest population segment of home buyers. Hite calls 2017 "the coming of age of the millennials."

"This age group, now 19-35, have passed the Baby Boomers as the largest living generation, and they are predicted to be the largest home-purchasing group this year," Hite said in a recent blog to other Realtors. "As a buying segment, they will increasingly exert their 'must haves' on the housing market as their desires will shape the look of real estate for years to come."

Win Pratt, president of Pratt Home Builders, said during the Great Recession many potential first-time home buyers had to put off purchasing a home due to a lack of money, credit or equity. Tighter mortgage lending requirements after the housing slump also made getting a loan more difficult for some buyers.

"But as the market has started to get some steam, that is bringing back some people into the market who have been on the sidelines renting apartments and waiting for the economy to pick back up," Pratt said.

"The share of people renting apartments went up during the downturn. But I think the American dream of owning a home, having a family with a backyard, a dog and a picket fence, that hasn't changed.

"Most people still want their own home, and I don't think that will ever go away," he said.

Contact Dave Flessner at or 423-757-6340.