Home LoansMortgage
How Does LendingTree Get Paid?

How Does LendingTree Get Paid?

LendingTree is compensated by companies on this site and this compensation may impact how and where offers appears on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.

LendingTree Ranks the Most Popular U.S. Cities for Gen Z Homebuyers

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It may not have been previewed, commissioned or otherwise endorsed by any of our network partners.

In spite of the disruption caused by the coronavirus pandemic, many members of Generation Z (those born after 1996) are attending college, starting their careers and even buying homes for the first time.

Where are Gen Zers looking to buy? To answer this question, LendingTree analyzed mortgage purchase requests made by people aged 18 to 23 across the nation’s 50 largest metros in 2020.

Although LendingTree found that Gen Zers currently comprise less than 10% of potential homebuyers in any of the nation’s largest metros, members of the generation are poised to make an even greater mark on the housing market as the economy continues to recover and more of them reach adulthood. While their overall impact on housing may be hard to predict, it’s clear that some Gen Zers are eager to join the ranks of homeowners sooner rather than later.

Key findings

  • Salt Lake City, a metro with a population that tends to skew younger, and the relatively inexpensive Oklahoma City and Cincinnati metros are where Gen Zers make up the largest percentage of purchase requests. In Salt Lake City, 9.08% of purchase requests came from Gen Zers. In Oklahoma City and Cincinnati, the share of Gen Z requests are 7.96% and 7.93%, respectively.
  • In super-expensive areas like San Francisco, San Jose, Calif., and New York, Gen Zers are making the smallest percentage of purchase requests. Gen Zers made just 2.44% of the purchase requests in San Francisco, 3.09% in San Jose and 3.44% in New York.
  • The average credit score of Gen Z borrowers varies significantly across the country. For example, the average credit score of 709 in San Jose — where the average Gen Z borrower credit score is the highest — is 66 points higher than the average score in Memphis where it is the lowest.
  • Much like credit scores, down payment amounts can also vary by quite a bit in different parts of the country. The difference between the average Gen Zer down payments in San Francisco and Cleveland is $82,368, where average down payments are respectively the highest and lowest across the nation’s 50 largest metros.

Most popular metros for Gen Z homebuyers

1. Salt Lake City

  • Share of mortgage requests coming from Gen Zers: 9.08%
  • Average Gen Z potential buyer age: 21.4
  • Average Gen Z potential buyer credit score: 676
  • Average Gen Z potential buyer down payment amount: $28,935
  • Average requested loan amount from Gen Zers: $244,709

2. Oklahoma City

  • Share of mortgage requests coming from Gen Zers: 7.96%
  • Average Gen Z potential buyer age: 21.6
  • Average Gen Z potential buyer credit score: 654
  • Average Gen Z potential buyer down payment amount: $19,381
  • Average requested loan amount from Gen Zers: $149,356

3. Cincinnati

  • Share of mortgage requests coming from Gen Zers: 7.93%
  • Average Gen Z potential buyer age: 21.4
  • Average Gen Z potential buyer credit score: 655
  • Average Gen Z potential buyer down payment amount: $18,883
  • Average requested loan amount from Gen Zers: $145,915

Least popular metros for Gen Z homebuyers

1. San Francisco

  • Share of mortgage requests coming from Gen Zers: 2.44%
  • Average Gen Z potential buyer age: 21.5
  • Average Gen Z potential buyer credit score: 702
  • Average Gen Z potential buyer down payment amount: $99,301
  • Average requested loan amount from Gen Zers: $554,461

2. San Jose, Calif.

  • Share of mortgage requests coming from Gen Zers: 3.09%
  • Average Gen Z potential buyer age: 21.5
  • Average Gen Z potential buyer credit score: 709
  • Average Gen Z potential buyer down payment amount: $93,932
  • Average requested loan amount from Gen Zers: $495,715

3. New York

  • Share of mortgage requests coming from Gen Zers: 3.44%
  • Average Gen Z potential buyer age: 21.7
  • Average Gen Z potential buyer credit score: 689
  • Average Gen Z potential buyer down payment amount: $57,475
  • Average requested loan amount from Gen Zers: $314,406


Tips for Gen Z homebuyers

Throughout 2021, home prices have risen throughout the country. This means that buying a home can be especially difficult for buyers without a lot of financial resources, including many Gen Zers.

This doesn’t mean that a home purchase is impossible for Gen Zers, however. On the contrary, there are still many ways for members of the generation to make homeownership a reality. Here are just a few tips for working toward that goal:

  • Boost your credit scores and savings. Because it’s a competitive seller’s market in many areas, would-be homebuyers need strong credit scores and substantial cash for a down payment in order to make a purchase. Build your homebuying fund now and check your credit reports and scores for errors. Improve your scores by making on-time payments each month, and paying down your balances to shrink your debt load.
  • Shop around for a mortgage. Before you hunt for houses, shop around for a mortgage. This not only helps you find a better mortgage rate, which can lower your monthly payments, but it also helps you figure out the loan amount you may qualify for and the home price you’ll be able to afford.
  • Consider first-time homebuyer programs. Look into programs available to first-time buyers that offer low down payment options. These programs can help make purchasing a home with a lower credit score or small down payment more attainable.

Methodology

LendingTree used generational definitions, from the Pew Research Center, to define the age range for Gen Zers as being born between 1997 and 2012.

Metropolitan statistical area (MSA) rankings were generated by looking at the percentage of total purchase mortgage requests from Gen Z borrowers on the LendingTree platform. The larger the share of requests from Gen Zers, the higher ranking a metro area received.

Borrower data was derived from mortgage requests and offers — given to users of the LendingTree mortgage shopping platform — across the nation’s 50 largest metropolitan areas from Jan. 1, 2020, to Dec. 31, 2020.

LendingTree senior research analyst Jacob Channel contributed to this report.

 

Today's Mortgage Rates

  • 2.53%
  • 2.07%
  • 2.58%
Calculate Payment
Advertising Disclosures Terms & Conditions apply. NMLS#1136