Lansing is a top city for millennial home buyers

LANSING — Olivia McCormick relishes yard work.

It's one of her favorite parts about being a homeowner, she said, along with the additional privacy and the extra space for her dog.

The 26-year-old bought her one-story cottage-style house on Lansing's south side in September after living with her family after college to save money.

"As soon as I pulled up to the house and went in the living room, I knew it was the one,” she said. “I’ve really enjoyed being in charge of my own home."

McCormick isn't unique among Lansing residents. The city is one of the most popular in the country for millennial home buyers, according to a recent analysis from LendingTree.

In March, the online loan marketplace released a study of the 100 most popular cities for millennial home buyers after analyzing mortgage requests and offers for borrowers ages 35 years and under.

Des Moines, Iowa, ranked first in the nation. Lansing was fourth, and Grand Rapids was sixth, according to the analysis.

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The average loan amount requested for that age group nationwide is $166,863. The average loan amount in Lansing is $103,719. The average down payment in Lansing was $13,286, according to LendingTree.

What makes a city appealing to millennial home buyers is a combination of affordable home prices and a recovering economic environment, said LendingTree Chief Economist Tendayi Kapfidze.

“It matters that there’s a dynamic job market, that people can get good, stable jobs that allow them to save up, so they can get that down payment together," he said.

The biggest challenges for young home buyers are having money for a down payment and a good credit history, Kapfidze said.

"The monthly mortgage payment typically isn’t going to be significantly different from a monthly rental payment," he said. "The tough part is getting over that down payment hurdle."

McCormick said her monthly mortgage payment is around $640. The one-bedroom apartments in the area that would let her have her dog — a pitbull-terrier mix — were at least $800 per month, she said.

After spending a few years saving, she said, she was surprised at what she could afford.

“You have to do your research and get out there and see what’s available to you,” she said.

A seller's market

While prices in Lansing are still relatively affordable, the city, like the rest of the country is becoming more of a seller's market, said Roger D Weymouth, the president of the Greater Lansing Association of Realtors.

It boils down to a lack of inventory compounded with high demand, he said.

“Now is probably the most phenomenal time to put your home on the market," Weymouth said.

Lansing's average home sale price is a little under $105,000, Weymouth said.

Tracey Hernley, a real estate agent with Coldwell Banker Hubbell BriarWood, said she often calls clients to tour the day homes hit the market since local demand is so high.

On a recent Friday afternoon, Hernly took clients Daniel Normandin, 27, and Lauren Shuff, 24, to look at a two-story house near REO Town.

The pair meandered through the house, clutching packets with information about the asking price and the home's features. Hernley ensured they looked at whether the windows were new and asked them how they envisioned using different rooms.

With a dog and a cat at home, Shuff said, they're primarily after more room.

"We're cramped," she said. "We want to grow into a space."

Along with extra space, Weymouth said, independence is a big driver for young home buyers.

"You can do anything you like with the home. It’s yours," he said. "There’s safety in that.”

Daniel Gottschalk, 28, spent his first months in his Old Town home painting, refinishing cabinets and working on other small jobs. He said he's taken pride in improving and owning his own home.

But becoming a homeowner also felt like a smart financial move, he said. Renting felt like "a waste of money."

"You're not getting anything back," he said. "With a house, it's an investment. You’re building equity.”

A budget-oriented generation

Many millennials are willing to sacrifice on space in their homes in order to save for travel or other hobbies.

“Bigger was better for so long," said Erica McAvoy, a real estate agent with Coldwell Banker Hubbell BriarWood. "And they’ve turned that around."

She said Lansing is more popular among millennials than the outlying Lansing suburbs where home prices can be higher. She said people under the age of 35 make up about 25 percent of her client base.

Nationally, more than one-third of all home purchases were made by millennials in the 12 months ending last July, making the group the most active generation of buyers, according to a recent National Association of Realtors survey.

They're also smart with their money, McAvoy said.

“They’re more budget-oriented and much more financially savvy than any other generation we've seen thus far,” she said.

Why Lansing?

There's a handful of reasons Jack Nowakowski decided to buy a house in Lansing last fall.

Each year, there's new bars and restaurants to take out-of-town friends to. There's a stable job market. And Lansing is centrally located in the state, making day trips to other cities easy.

Nowakowski said the cost of living in Lansing was another big appeal. He and his wife bought a house in the Colonial Village neighborhood for around $120,000 in October.

“We like that it’s on the come up," Nowakowski said. "It’s where Grand Rapids was 15 years ago. You can get in at the ground level."

Sara Marjaske and her husband are renovating a duplex near Old Town. She said they feel like they're getting a first-hand look at the revitalization of the area.

“We’re excited to be in Lansing and to see it change and grow," she said. "We’re excited to be a part of it."

Advice for home buyers

Look beyond the exterior : Gabrielle Dowker, 30, a software support worker who recently purchased a home in East Lansing, said it's important to look beyond features like appliances and flooring. She also recommended getting multiple inspections.

“I was looking at what’s shiny, but you really have to pay attention to the roof and the basement," she said. "You have to think about the bones of the house.”

: Gabrielle Dowker, 30, a software support worker who recently purchased a home in East Lansing, said it's important to look beyond features like appliances and flooring. She also recommended getting multiple inspections. “I was looking at what’s shiny, but you really have to pay attention to the roof and the basement," she said. "You have to think about the bones of the house.” Shop around for a mortgage: LendingTree Chief Economist Tendayi Kapfidze said home buyers should also get pre-approved for a mortgage before starting their search.

“The more lenders you look at, the more likely you’re going to get the best rate," he said.

LendingTree Chief Economist Tendayi Kapfidze said home buyers should also get pre-approved for a mortgage before starting their search. “The more lenders you look at, the more likely you’re going to get the best rate," he said. Flexibility is key: Every house will have a trade-off, but what's most important is that it's within price range, said Olivia Somsel, an East Lansing-based REMAX real estate agent.

"You have to have some capacity for compromise," she said. "There's no perfect house."

Top 10 most popular cities in the United States for millennials

1. Des Moines, Iowa

2. Pittsburgh

3. Buffalo, New York

4. Lansing, Michigan

5. Fort Wayne, Indiana

6. Grand Rapids, Michigan

7. Scranton, Pennsylvania

8. Syracuse, New York

9. Youngstown, Ohio

10. Minneapolis

Contact reporter Haley Hansen at (517) 267-1344 or hhansen@lsj.com. Follow her on Twitter @halehansen