New York’s taxes are driving out thousands, but Millennials keep moving in
Millennials saved for down payments, are ready to buy homes
More Americans are fleeing New York than any other state in the union, many as a result of high taxes due to the Tax Cuts and Jobs Act capping state and local tax deductions. Despite that, Millennials continue to move into the metropolitan area.
Forty-eight percent of home-buyers nationwide are Millennials, Elliman New York real estate agent Jill McDowell told FOX Business’ Stuart Varney on Tuesday, and this trend holds true of her clients in America’s largest city.
“They come in; they are preapproved," McDowell explained during "Varney & Co." "They’ve lived with mom and dad for the most part. They are able to save a lot of money for the down payment and they’re ready to go."
NEW YORK, NEW JERSEY, HAVE HIGHEST RESIDENT EXODUS IN 2019
In 2020, Millennials are expected to account for half of all home mortgages as 4.8 million of them reach peak home-buying age, according to Reator.com’s 2020 housing forecast. Gen X was the last generation to account for such a large portion of home mortgages back in 2013.
The availability of housing in the New York City area is limited, she noted, leading to bidding wars. However, Millennials—who are informed sufficiently to avoid overpaying for a property — often walk away from the deal if they deem the price too high.
BARACK OBAMA'S CHILDHOOD HOME HITS THE MARKET
Realtor.com predicts throughout 2020 buyers will continue to struggle with housing affordability despite moderate mortgage rates.
These Millennials are going against the overall trend in the housing market which sent droves of Americans out of high tax states like New York, New Jersey and Connecticut to lower-tax locations like Florida.
In New York, where McDowell works, property taxes are high and a large percentage of that money goes to schools. When people reach an age where they no longer have children in schools, they begin to question what it is they are paying for, she noted.
According to recent data from the IRS, the Sunshine State — a popular haven for people looking to lower onerous tax burdens of states like New York, New Jersey and Connecticut — benefitted from the trend.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
The state raked in a net adjusted gross income of $16 billion in 2018. That's way more than any other state. Arizona, for example, raked in the second-highest total from migration at $3.5 billion.
Texas, another no-income-tax state, generated $3.4 billion. North Carolina and South Carolina followed the Lone Star State on the list. As previously reported by FOX Business, Arizona and South Carolina were two of the most popular destinations for movers last year because of the warmer climates and retirement opportunities.
On the flip side, two high-tax states – New York and California — lost a significant amount of adjusted gross income.
The Empire State lost $9.6 billion as wealthy individuals and businesses moved out. Recently, President Trump announced he had decided to change his domicile from New York to Palm Beach, Florida. Billionaire investor Carl Icahn is also headed to Miami, and billionaire hedge fund manager Leon Cooperman fled to Boca Raton.
California lost about $8 billion in 2018, New Jersey about $3.1 billion and Connecticut lost around $1 billion.
CLICK HERE TO READ MORE ON FOX BUSINESS
FOX Business' Brittany De Lea contributed to this report.