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New survey data show that slightly more Millennials are buying or renting their homes in suburban areas, 38 percent of respondents, than in cities, at 37 percent.
The survey from Ernst & Young also finds that 41 percent of Millennial homeowners prefer the 'burbs over cities, small towns, and rural communities, a five percent increase from 2016, says Ernst & Young Americas tax policy leader, Cathy Koch. "It was a surprise to me to see this generation increasingly choosing suburban locations," Koch tells CNBC, adding, "The 'suburbs' may very well be smaller cities close to larger urban areas — these still afford the richness of city living (including employment opportunities) at maybe lower home prices."
Money is likely a significant factor. Home buyers can expect to pay 26.5 percent of their income to purchase a median-value home in a city, but only 20.2 percent of their income for a similar home in the suburbs, according to a recent report by Zillow. Roughly two out of five millennials currently own a home, Ernst & Young finds, which is up 14 percentage points from two years ago. But millennials are still buying homes at a slightly lower rate than previous generations: Roughly 45 percent of Gen-Xers and Baby Boomers owned when they were between the ages of 25 and 34.
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