(Bloomberg) -- Cities may be the top choice for millennials whorent apartments, but young homebuyers are moving in droves tothe suburbs, where prices are lower and backyards areplentiful.

The share of people 35 or younger who are buying homes in urbanareas fell to 17% from 21% in a 2014 survey, according to aNational Association ofRealtors study released Wednesday.

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While many millennials say they prefer urban living, the risingprices found in downtowns is proving a barrier to buying, saidLawrence Yun, the association’s chief economist. Wealthyempty-nesters and foreign investors are fueling competition for ashrinking supply of listings as developers continue to focusprimarily on building high-end condos. Furthermore, young buyerswith children want good schools and space for them to play, hesaid.

“The story about millennials wanting to live in a city withenergy and walkability, that’s still taking place among renters,”Yun said in a telephone interview. “But as they’re going to theowning stage, we are seeing more traditional homebuying, which isout in the suburbs.”

Biggest segment

People in their twenties and early thirties, already the largestsegment of the U.S. homebuying market, are increasingly looking topurchases amid job growth and soaring rents. The group represented35% of buyers, up from 32% a year earlier, according to theRealtors’ 2016 Home Buyer and Seller GenerationalTrends study.

The median income of millennial homebuyers in this year’s surveywas $77,400, and the typical home they bought had 1,720 square feet(160 square meters) and cost $187,400.

Purchases by younger buyers are likely to grow gradually asmillennials work through such hurdles as student debt and lack ofmoney for down payments, and start families, something they’redoing later than previous generations did.

The U.S. homeownership rate rose in the second half of 2015after falling to the lowest level since the 1960s. Apartment rentsthat rose to a record in the fourth quarter, according to ReisInc., also is helping drive young people to buy instead oflease.

The report was based on responses from 6,406 primary-home buyerswho made purchases between July 2014 and June 2015.

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