Millennials Are Flocking to Smaller Cities Now

While millennials settled in large cities during their early careers and young adulthood, the generation that spans from 28 to 43 years old is now looking to settle down in a different kind of location.

A report that was published earlier this week from moveBuddha, a moving and storage service based in Athens, Georgia, discovered that during their 40s, millennials are more likely to choose small cities like Spartanburg, South Carolina, and Spring Hill, Tennessee, over past hotspots like Austin and Denver.

The top three cities attracting millennials based on the in-to-out move ratio were Asheville, North Carolina, Spartanburg, South Carolina, and Lafayette, Louisiana. However, when it came to density, Spring Hill, Tennessee, topped the list with millennials—making up 24 percent of its population.

“Millennials are in their peak home-buying years, and the cost-of-living in their favorite big cities is simply out of reach for many, especially if they are looking to buy a home,” Kristen Klepac, a spokesperson for moveBuddha, told Newsweek. “Smaller cities often provide a better quality of life without the sticker shock, especially for young families or remote workers who no longer feel tethered to major metro hubs.”

South Carolina had a particular draw among millennials, with Spartanburg, Charleston, and Rock Hill all having above-average millennial populations and some of the highest in-to-out move ratios.

“The rising costs in major cities are driving people to establish roots in smaller, less urbanized areas,” Kevin Thompson, a finance expert and the founder and CEO of 9i Capital Group, told Newsweek. “Many of these cities, like Spartanburg and Asheville, are attractive due to their proximity to colleges and major universities. Additionally, housing prices in these smaller areas are likely more affordable compared to larger cities like Denver and Austin.”

Average home prices could be playing a major role in where millennials settle down as home ownership remains out of reach for millennials.

“It’s not surprising at all to see markets in the Carolinas ranked highly by these metrics,” Realtor.com senior economist Joel Berner told Newsweek. “Millennials are chasing low prices and high shares of newly constructed homes in these smaller Southeastern markets where they can actually afford the American Dream.”

Once popular cities like Austin, Denver and Seattle don’t have that same draw, with these city real estate prices inching higher and higher.

“The tech hub cities like Seattle, Denver, Austin, and San Francisco have grown prohibitively expensive for first-time homebuyers, especially in the current high-mortgage rate environment, so many are looking to the exurbs and small cities,” Berner said, adding that the tech hub markets could continue to cool if millennial demand increasingly pulls back.

In today’s housing market, home affordability is a major driver of relocations, and it often leads Americans to smaller cities.

“Remote work and a renewed emphasis on work-life balance have opened up possibilities and allowed relocating Americans to prioritize lifestyle and affordability over proximity to traditional metropolitan employment hubs,” Klepac said.

The shift could make the smaller city markets more expensive in the long run, however.

“These smaller, popular move-to cities with an established millennial presence are seeing increased demand, which not only boosts their growth as economic and cultural hubs but also intensifies competition in their housing markets, potentially driving up prices and reshaping affordability in these areas,” Klepac added.

Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, said this trend has persisted over the last decade as millennials have changed their priorities toward family and long-term financial stability.

“The expenses a major city brings with it – from housing to food to transportation – makes it difficult to achieve those changing goals,” he told Newsweek. “Moving to smaller towns where housing prices aren’t as unattainable, other costs are low, and personal and professional environments are safer just seems like the most logical step for them.”