As of 2022, adult Gen Zers (ages 18-25) account for 14.91% of potential homebuyers across the nation’s 50 largest metros, and this metric is only expected to grow in the coming years. As Gen Z’s homeownership grows, where is the demographic looking at buying?
LendingTree’s new report analyzed mortgage purchase requests from adult Gen Z users of the LendingTree platform across the nation’s 50 largest metros in 2022 to determine the most popular large metros for homebuying among the demographic.
The top ten metros:
- Salt Lake City, Utah, at a 22.59% share of mortgage requests coming from Gen Zers
- Oklahoma City, Oklahoma, at 22.36% share
- Birmingham, Alabama, at 20.79% share
- Indianapolis, Indiana, at 20.29% share
- Cincinnati, Ohio, at 20.27% share
- Louisville, Kentucky, at 20.20% share
- Minneapolis, Minnesota, at 18.69% share
- St. Louis, Missouri, at 18.60% share
- Nashville, Tennessee, at 17.94% share
- Kansas City, Missouri, at 17.93% share
Key highlights:
- In expensive San Francisco, New York and San Jose, California, the smallest percentage of mortgages are being requested by Gen Zers. Respectively, 7.76%, 8.88% and 9.70% of mortgage requests in these metros come from Gen Zers.
- While these shares are lower than the 50-metro average of 14.91%, they’re still nothing to sneeze at. As Gen Zers age over the coming years, these shares will likely rise even higher.
- All in all, six of the 10 least popular metros for potential Gen Z buyers are in California. This shows how much of an obstacle the state’s expensive real estate can be for younger buyers to overcome.
- The average credit score among Gen Zers who made mortgage purchase requests is highest in Buffalo, New York, at 707—56 points above the average score of 651 in New Orleans, where it’s the lowest.
- Down payment amounts also vary by metro. There’s a $59,034 difference between the average down payment among potential Gen Z homebuyers of $77,786 in San Jose and $18,752 in Oklahoma City—the highest and the lowest across the 50 largest metros.
- Like credit scores and down payments, mortgage amounts can change quite a bit depending on where buyers live. In San Jose, the average mortgage amount offered to Gen Zers is $541,436. That’s $347,836 more than the $193,600 average in Cleveland, where potential Gen Z homebuyers borrow the least.
Major takeaway:
LendingTree’s Senior Economist and report author, Jacob Channel, said that, “Our findings illustrate that Gen Zers make up a noteworthy share of homebuyers in many of the nation’s largest metros. While this doesn’t undercut how difficult it can be to buy a home—especially for younger buyers without as much cash or experience in the housing market—it helps dispel the myth that homeownership is impossible for all young Americans.”
“Owing to these challenges, cheaper alternatives to buying, like renting or living with family, may remain the best option for many members of Generation Z,” continued Channel. “Fortunately, while these more affordable options might be more attainable for now, Gen Zers will likely have plenty of opportunities to become homebuyers over the coming years as their earnings increase. Though it may not happen overnight, Gen Zers will likely make up the biggest share of homebuyers in the U.S. at some point, in the same way that millennials eventually became the dominant force in the housing market.”
For the full report, click here.
