Millennials aren't killing the 'burbs. They're embracing them. A new Ernst & Young survey of 1,200 adults aged 20-36 shows that more millennials are buying homes in the suburbs than in cities.

In fact, when choosing where to live, millennials are behaving much like their parents did. Overall, rent or own, 38 percent of millennials live in the suburbs, compared to 37 percent in the city.

Among millennial homeowners, the suburbs are the clear No. 1 choice: 41 percent of millennial owners opt for suburbs over cities, small towns or rural areas. That's up from 36 percent in 2016, Cathy Koch, EY's Americas Tax Policy Leader, tells CNBC Make It.

It's not just that they're settling down as they get older, either, Koch says. When looking at the very same age group today compared to two years ago, there's an increase in the share of millennials living in the suburbs.

"It was a surprise to me to see this generation increasingly choosing suburban locations to buy homes," Koch says, but the trend makes sense: "The 'suburbs' may very well be smaller cities close to larger urban areas — these still afford the richness of city living (including employment opportunities) at maybe lower home prices."

Money is likely a significant factor. Home buyers can expect to pay 26.5 percent of their income to purchase a median-value home in a city, but only 20.2 percent of their income for a similar home in the suburbs, according to a recent report by Zillow.

Roughly two out of five millennials currently own a home, Ernst & Young finds, which is up 14 percentage points from two years ago. But millennials are still buying homes at a slightly lower rate than previous generations: Roughly 45 percent of Gen-Xers and Baby Boomers owned when they were between the ages of 25 and 34.

Student loan debt and higher real estate prices play help explain why. Over 80 percent of renters aged 22-35 with student loans say that debt has delayed home-ownership, or made it all but impossible.

And although Koch is not a realtor, she expects millennials to continue gravitating to the 'burbs because they believe the economy is strong and that's keeping them optimistic and open to home-buying.

That optimism may also be fueled by an increasing number of homes available in many markets. The inventory of homes for sale over the past year is up by 1.3 percent, according to real estate website Redfin. The site also found that nearly one in three homes for sale in October had lowered its price, the highest level seen since 2010.

Overall, the national median sale price in October was $297,000.

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