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26 | Th e M Rep o RT Feature greater proportion of people age 45 and older than cities, and additionally bore the brunt of poverty increases, they began to assess a turnaround. In a 56-page report, the Urban Land Institute recognized subur- bia's challenges and discussed the ways millennials were influenc- ing the change. "Driven in part by powerful demographic forces, market prefer- ences have been shifting," read the report. "Signs point to an increas- ing appetite—especially among generation Y—for higher density living patterns and for transporta- tion options that include transit, walking, and biking." In a bid to attract and retain a young, talented workforce, sub- urban redevelopment initiatives launched across the country in a sweeping movement many are calling "new urbanism." "The differences between cities and suburbs are diminish- ing," added Brooking's Institute's metropolitan policy program director, Bruce Katz, noting that cities and suburbs will continue to look similar racially, ethically and socio-economically. Challenges of Homeownership T hough the national job market is greatly improving and interest rates remain just above 4.0 percent, the challenges of millennial homebuyers are immense. The National Association of Realtors reports that home- ownership among young adults (typically those aged 18 to 39) remains under the historic norm. Third-quarter analyses show that first-time homebuyers accounted for 33 percent of total home pur- chases, with home prices greatly outpacing incomes for potential buyers under the age of 35. Years after the recession, mil- lennials are still struggling to achieve the dream of homeown- ership. Still saddled by student loans, additionally tighter lending measures, and a lower inven- tory of starter homes, this group continues to face monumental barriers preventing them from participating fully in the housing market. Today, just 36 percent of millennials currently own a home. A Fannie Mae survey found that millennials overwhelm- ingly want to buy homes—90 percent of respondents said they preferred owning over renting. In fact, 75 percent of millennials believe homeownership is key to the American Dream and is a smart, long-term investment goal. In its latest Housing Confidence Index, 82 percent were confident or somewhat confident they will be able to afford a home some- day, according to Zillow. Zillow chief economist Stan Humphries called the survey "heartening," adding that by necessity today's millennials—in- cluding its renter population—are tomorrow's homebuyers. "Cynics might argue that these results are no more than youthful exuberance, or perhaps some na- iveté, but that's missing the point," he said in the report. "We need this generation to be confident and wanting to buy, regardless of the difficulties they face." Suburbs May Offer Reprieve T he financial challenges millennials face may indicate why they are drawn to suburban living arrangements. Nationally, home prices are on the rise. The median exist- ing single-family residence in the third quarter was about $217,000, up 4.9 percent from one year ago. The average income of a first-time homebuyer is about $68,300, while the median home price is about $169,000. But average median home prices in the country's biggest cities are roughly double the national aver- age. Consider home prices and salaries needed to secure average housing in the following cities (via Business Insider): • Chicago: Income - $32,389; Avg. Home - $187,100 • Washington D.C.: Income - $62,810; Avg. Home - $368,000 • New York: Income - $66,167; Avg. Home - $386,300 • Los Angeles: Income - $72,127; Avg. Home - $423,900 • San Francisco: Income - $115,510; Avg. Home - $682,410 Most millennials can't com- pete with older, more financially mature buyers in these markets. That's why they're looking to outlier suburbs and smaller towns to achieve homeownership. For example, Samp was able to take advantage of the United States Department of Agriculture (USDA) rural home loan pro- gram, which offers incentives to people who purchase a property in a rural area as defined by USDA. The loans require no down payment and offer up to 100 percent financing of the prop- erty value for qualified buyers. Generally, the income require- ments must fall under 80 percent of the county's median average— and with so many millennials just getting their feet wet in their careers, this usually isn't a hard requirement to meet. Other municipalities may have their own bond programs, down payment assistance, or grants to incentivize buyers to purchase homes in underserved and un- derpopulated areas. It's unclear whether the suburbs will reclaim their past glory, but this new generation of homeowners hold the key to their future. Chad JaMpedro is the president of GSF Mortgage Corp. With nearly 20 years in business, GSF Mortgage has embraced the next generation of homeowners with its GOGSF brand, continuing its dedi- cation to flexible and transparent lending. With more than 140 team members in 26 locations across the Midwest and East Coast, GSF Mortgage keeps "Lending in Your Favor." Reach Jampedro at cjampedro@gogsf.com. The 10 Core Principles of the New Urbanism Movement 1. Walkability 2. Connectivity 3. Mixed-use and diversity 4. Mixed housing 5. Quality architecture & urban design 6. Traditional neighborhood structure 7. Increased density 8. Green transportation 9. Sustainability 10. Quality of life Source: www.newurbanism.org And it looks a little bit dif- ferent than the baby boomers' version. Unlike baby boomers, millen- nials are more highly educated, more diverse, and more impa- tient when it comes to job and financial ascension. But whereas baby boomers were thought to be somewhat individualistic—lit- erally building their own plots to call home—millennials are more communal. They value such things as public gathering spaces, public transit, and compact, walkable neighborhoods—pretty much the opposite of their par- ents' ambitions. Unsurprisingly, suburbs and think tanks have begun to take note. In 2010, when it was revealed that suburbs held a