Phoenix is a top destination for wealthy millennials, but why? Here's the fascinating story behind this ranking.
A recent study reveals a surprising hotspot for affluent millennials: Phoenix-Mesa-Chandler, ranking 3rd among 73 metro areas. Trust & Will's analysis (https://trustandwill.com/) delves into job markets, income, assets, and real estate to uncover where millennials are accumulating wealth and where future growth is likely.
Local Insights: Phoenix boasts a 51.54% GDP growth over five years (#4), a 31.29% increase in building permits (#6), and a startup density of 26,894 (#11). The millennial population density is 21.39%, with key areas to watch being employment growth at 9.65% (#24) and high-income filers at 5.61% (#30).
The Big Picture: Millennials are stepping into a unique financial landscape. Estimates suggest a staggering $124 trillion will be transferred to younger generations within two decades. This wealth will significantly influence their careers, homeownership, investments, and local economies, especially as millennials are poised to receive the lion's share of the Great Wealth Transfer.
Trust & Will's analysis considered eight indicators across the 73 most millennial-populated U.S. metros. These indicators include local GDP growth, employment changes for 25-44-year-olds, median household income growth, startup activity, high-income filers, high-value asset holders, and two housing indicators: Zillow Home Value Index and building permit applications over five years.
Regional Trends: The top 10 metros are predominantly in the South and West. This distribution isn't about migration but reflects the current alignment of the eight indicators.
Preparing for the Future: The impending large-scale wealth transfer will place vast and complex assets in the hands of younger individuals. It's crucial to be prepared. Having clear beneficiary designations, updated wills or trusts, and a plan for managing newfound wealth can help avoid mistakes when the money starts flowing.
The Top 5 Cities for Affluent Millennials:
Austin–Round Rock–San Marcos, TX:
- Overall Rank: 1
- Millennial Population Density: 25.84%
- Economic Indicators Rank: 5 (5-yr GDP Growth: 63.50% (#1), Employment Change: 19.38% (#2), Median HH Income Change: 23.45% (#33), Startup Density: 16,876 (#21))
- Wealth Concentration Rank: 8 (High-Income Tax Filers: 9.39% (#7), High Value Asset Indicator: 12.80% (#15))
- Housing & Real Estate Rank: 10 (Zillow Home Value Index: $451,858 (#25), Real Estate Permits Change: 22.54% (#17))
Raleigh–Cary, NC:
- Overall Rank: 2
- Millennial Population Density: 21.59%
- Economic Indicators Rank: 8 (5-yr GDP Growth: 46.45% (#10), Employment Change: 11.55% (#16), Median HH Income Change: 25.17% (#21), Startup Density: 8,188 (#36))
- Wealth Concentration Rank: 11 (High-Income Tax Filers: 8.46% (#8), High Value Asset Indicator: 3.46% (#41))
- Housing & Real Estate Rank: 11 (Zillow Home Value Index: $450,409 (#26), Real Estate Permits Change: 22.64% (#16))
Phoenix–Mesa–Chandler, AZ:
- Overall Rank: 3
- Millennial Population Density: 21.39%
- Economic Indicators Rank: 6 (5-yr GDP Growth: 51.54% (#4), Employment Change: 9.65% (#24), Median HH Income Change: 24.93% (#22), Startup Density: 26,894 (#11))
- Wealth Concentration Rank: 26 (High-Income Tax Filers: 5.61% (#30), High Value Asset Indicator: 13.82% (#14))
- Housing & Real Estate Rank: 7 (Zillow Home Value Index: $456,834 (#24), Real Estate Permits Change: 31.29% (#6))
Boise City, ID:
- Overall Rank: 4
- Millennial Population Density: 20.97%
- Economic Indicators Rank: 4 (5-yr GDP Growth: 56.26% (#2), Employment Change: 15.77% (#4), Median HH Income Change: 26.23% (#14), Startup Density: 6,400 (#44))
- Wealth Concentration Rank: 32 (High-Income Tax Filers: 5.66% (#29), High Value Asset Indicator: 2.11% (#54))
- Housing & Real Estate Rank: 13 (Zillow Home Value Index: $493,999 (#19), Real Estate Permits Change: 9.85% (#31))
Denver–Aurora–Centennial, CO:
- Overall Rank: 5
- Millennial Population Density: 25.36%
- Economic Indicators Rank: 14 (5-yr GDP Growth: 44.77% (#13), Employment Change: 9.19% (#27), Median HH Income Change: 23.59% (#30), Startup Density: 20,425 (#17))
- Wealth Concentration Rank: 9 (High-Income Tax Filers: 8.23% (#10), High Value Asset Indicator: 10.49% (#20))
- Housing & Real Estate Rank: 15 (Zillow Home Value Index: $592,884 (#11), Real Estate Permits Change: -5.23% (#48))
And here's where it gets controversial: Is this wealth concentration a positive or negative trend? Are these cities becoming exclusive hubs for the wealthy, or are they fostering environments that promote upward mobility for all? The data invites discussion on the implications of this wealth distribution and its potential impact on social dynamics and local communities.
What are your thoughts on this ranking and the future of wealth distribution among millennials? Do you think these cities will continue to attract affluent millennials, and what might be the broader societal effects?
