Housing is so unaffordable in major cities that millennials are moving back to the suburbs, Harvard research finds
When it came time for millennials to fly the coop in the 2000s and early 2010s, many of them moved to large urban areas, a phenomenon came to be known as the “back to the city” movement. But with mortgage rates, home prices, and rents as high as they are now, this generation is reversing its mass exodus and moving back to the suburbs, a new Harvard University study shows.
During the past decade, millennials found themselves moving to suburbs that were farther away from the city center, finds the research from Harvard’s Joint Center for Housing Studies.
“While there is extensive research and discussion about millennial preferences for walkable urban areas, we found that the places with the largest increases of early millennials were both suburban and on the periphery of metropolitan areas,” according to the study by Riordan Frost, a senior research analyst at the center and coauthors Whitney Airgood-Obrycki and Hyojung Lee.
These three researchers were particularly interested in these migration patterns because they’re all millennials themselves, Frost tells Fortune.
The main culprit for this migration trend is housing affordability in cities. Indeed, millennial suburbanization was strongest in metro areas with the least affordable urban centers and those with the fewest available “family-sized” housing units, defined as those with at least three bedrooms, according to the paper. This suggests that millennials are leaving the cities where they can’t own a home or raise children.
“Places where we’re losing more millennials included high-cost coastal places like LA, New York City, San Diego, [and] Philadelphia,” Frost says. “We see more suburbanization in these really high-cost metropolitan areas, places with really high-cost urban centers, which promotes millennials moving to the suburbs of those metropolitan areas.”
Is Gen Z going to replace millennials in cities?
While some millennials are making their grand exit from expensive cities, Gen Zers are moving right in. In fact, between 2021 and 2022, more than 42% of people moving to New York City were Gen Zers, according to Census Bureau data. Plus, major metropolitan areas, including New York, are experiencing population losses among all generations, except for Gen Z, a Today’s Homeowner report shows. So many Gen Zers have made the move to the Big Apple that the city saw its lowest vacancy rate and biggest housing crunch in the past 50 years.
“Younger generations certainly constitute a significant portion of those returning to the city for its social, cultural, and convenience appeal,” Jason Bordainick, cofounder and managing partner at New York-based Hudson Valley Property Group, previously told Fortune. “Whether working in-office or remotely, the appeal of urban living, especially in Manhattan, remains strong.”
So how are Gen Zers affording city living if millennials can’t? Frost says it has more to do with the type of housing millennials are looking for at this stage in life—more spacious apartments or homes, which are in short supply.
“Cities—especially with this millennial surge that happened in the late 2000s, early 2010s [developed] to meet the needs of millennials at the time,” Frost says. “But a lot of that made cities more of a fit toward young adults. Maybe they liked small housing sizes, the types of amenities. That made [cities] ill-suited for retaining millennials as they grew in household size.”
Millennials are “also contending with school and childcare costs—and [are] more likely to form a household in which both parents work,” Ted De Barbieri, a professor at Albany Law School who specializes in property and housing law, tells Fortune. “Moving close to family in the suburbs and engaging in some good-old-fashioned alloparenting by letting grandparents and extended family pitch in on the toil of child-rearing is also, undoubtedly, a draw.”
But speaking of amenities such as restaurants, bars, parks, and other attractions, millennials are bringing those with them to the suburbs. While researchers initially thought that millennials were forgoing lifestyle-rich cities when they decamped to the suburbs, they found that during the past decade, the suburbs have become more city-like.
“It seems like millennials bring the city with them,” Frost says. “We were kind of surprised to see the millennials were moving to far-flung and peripheral suburban areas, but it could be that they’re changing those places as they go there.”
