Homeownership is on the rise again in the United States, and millennials make up the largest segment of buying. The climbing rate is a boost to both the real estate and retail sectors because new homeowners buy plenty of products, from furniture to lawnmowers, to fill their abodes.

While the uptick in homeownership is nowhere near pre-recession levels, it marks a significant shift from a decade ago, when an unstable job market kept most consumers from even contemplating the purchase of a home. But what has changed? The Knowledge@Wharton show, which airs on Wharton Business Radio on SiriusXM channel 111, invited Benjamin Keys, Wharton professor of real estate and fellow at the National Bureau of Economic Research; Richard K. Green, public policy professor and director of the University of Southern California’s Lusk Center for Real Estate, and Eric Sussman, adjunct professor of accounting and real estate at the University of California Los Angeles, to answer that question.

Following are five key points from their conversation. (Listen to the full podcast using the player at the top of the page.)

Millennial House Hunters Are Coming of Age

Economic recovery is the most direct explanation for why more millennials are buying homes. That generation was graduating from college and entering the workforce just as the Great Recession hit. They found themselves in the same predicament as Americans across the age spectrum who were unemployed, under-employed, working part time or filling temporary jobs.

“It’s really a function of the overall economy improving dramatically,” Keys said. “You had this really long overhang of very high unemployment rates or under-employment rates, so they just didn’t have the job stability that would lead to the point where you could save up for a down payment and feel confident and secure that you would want to stay in one place for a long time.”

Green agreed, adding that marriage is the No. 1 predictor of whether people buy homes. The marriage rate among millennials has risen slightly as they have gotten older and more financially stable. Green also thinks fintech has made a difference.

“The way traditional lenders underwrote meant that there were a lot of well-qualified people who weren’t able to get access to mortgage markets,” he said. “If you look at some of the fintech companies using data science to underwrite people, they are finding people who are very good risks to lend to that they’re starting to bring into the market.”

Sussman put it more simply, saying millennials “are reaching an age where they can finally afford to buy a home. Rates have remained reasonably low, so affordability is possible as well.”

“If you look at some of the fintech companies using data science to underwrite people, they are finding people who are very good risks to lend to that they’re starting to bring into the market.”–Richard K. Green

Buying Becomes More Attractive as Rents Rise

As the saying goes in real estate, it’s all about location. The affordability of a home depends or where it is.

From San Diego to Seattle on the West Coast, and from Washington, D.C., to Boston on the East Coast, “affordability is bad,” said Green. But homes are relatively more reasonable in many other parts of the country. He cited Dallas and Houston, where job markets are strong and “nice” homes can be found for about $200,000.

“Between the Appalachians on the one side and the Rockies on the other, affordability is very good,” Green said. “But you get to the coasts, and it’s still a real problem.”

Rising rents, especially along the coasts, “is really shifting the trade-off between owning versus renting,” Keys said. Rents are reaching astronomical heights in highly desirable cities because that’s where millennials want to be, he said. Young people flock to urban areas for work, and the demand for housing increases as a result. In the San Francisco area, for example, six times more jobs were created than housing units in the last decade.

“That may be the most severe case of under-building, but that’s true in a lot of the coastal cities,” Keys said….