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Most Popular Metros for Gen Z Homebuyers

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Though many Generation Zers — those born between 1997 and 2012 — are children or young teens, some older members are attending college, starting careers and buying homes for the first time.

But where are Gen Zers looking to buy? To answer, LendingTree analyzed mortgage offers given to adult Gen Z users of the LendingTree platform across the nation’s 50 largest metros from Jan. 1 through Dec. 31, 2021.

We found that although adult Gen Zers (ages 18 to 24) account for an average of 10% of homebuyers across the nation’s 50 largest metros, members of this generation are making a growing splash in the overall housing market.

Key findings

  • Salt Lake City, often popular with younger homebuyers, has the largest share of mortgages offered to Gen Zers. With 16.60% of mortgage offers in the metro going to Gen Zers, Salt Lake City retains its No. 1 spot from last year’s rankings.
  • After Salt Lake City, relatively inexpensive Louisville, Ky., and Oklahoma City are the next most popular metros among Gen Z buyers. Respectively, 15.86% and 15.34% of mortgage offers in these two metros go to Gen Zers. Oklahoma City fell one spot from last year, while Louisville rose from seventh.
  • In super-expensive parts of the country — including San Francisco, New York City and San Jose, Calif. — the smallest percentage of mortgages are being offered to Gen Zers. As was the case in last year’s ranking, the San Francisco metro was the least popular among Gen Z buyers, with only 3.64% of mortgage offers going to members of that generation. Though their rankings swapped from last year, New York and San Jose round out the bottom three, with only 4.41% and 4.53% of mortgage offers going to Gen Zers.
  • The average credit score of Gen Z mortgage borrowers can vary widely across the U.S. The average credit score among Gen Z homebuyers is highest in San Francisco at 72331 points above the average score where it’s lowest (New Orleans).
  • Down payment amounts also vary by metro. There’s a $35,155 difference between the average down payment among Gen Z homebuyers in Los Angeles and New Orleans, where they’re the highest and the lowest, respectively, across the 50 largest metros.
  • Like credit scores and down payments, mortgage amounts can also change quite a bit depending on where buyers live. In San Jose, Calif., where Gen Z homebuyers get the largest mortgages, the average loan amount offered to members of that generation totaled $425,545. That’s $253,772 more than the average loan amount in Louisville, Ky., where Gen Z homebuyers are borrowing the least.

Most popular metros for Gen Z homebuyers

No. 1: Salt Lake City

  • Share of mortgages offered to Gen Zers: 16.60%
  • Average Gen Z homebuyer age: 21.82
  • Average credit score among Gen Z homebuyers: 701
  • Average down payment amount among Gen Z homebuyers: $28,874
  • Average requested loan amount among Gen Z homebuyers: $291,952

No. 2: Louisville

  • Share of mortgages offered to Gen Zers: 15.68%
  • Average Gen Z homebuyer age: 22.09
  • Average credit score among Gen Z homebuyers: 699
  • Average down payment amount among Gen Z homebuyers: $14,268
  • Average requested loan amount among Gen Z homebuyers: $171,773

No. 3: Oklahoma City

  • Share of mortgages offered to Gen Zers: 15.34%
  • Average Gen Z homebuyer age: 22.17
  • Average credit score among Gen Z homebuyers: 697
  • Average down payment amount among Gen Z homebuyers: $19,690
  • Average requested loan amount among Gen Z homebuyers: $173,752

 

Least popular metros for Gen Z homebuyers

No. 1: San Francisco

  • Share of mortgages offered to Gen Zers: 3.64%
  • Average Gen Z homebuyer age: 22.53
  • Average credit score among Gen Z homebuyers: 723
  • Average down payment amount among Gen Z homebuyers: $42,933
  • Average requested loan amount among Gen Z homebuyers: $408,005

No. 2: New York

  • Share of mortgages offered to Gen Zers: 4.41%
  • Average Gen Z homebuyer age: 22.53
  • Average credit score among Gen Z homebuyers: 717
  • Average down payment amount among Gen Z homebuyers: $31,877
  • Average requested loan amount among Gen Z homebuyers: $302,268

No. 3: San Jose, Calif.

  • Share of mortgages offered to Gen Zers: 4.53%
  • Average Gen Z homebuyer age: 22.44
  • Average credit score among Gen Z homebuyers: 722
  • Average down payment amount among Gen Z homebuyers: $48,041
  • Average requested loan amount among Gen Z homebuyers: $425,545

 

What’s in store for Gen Z buyers in 2022 and beyond

As our findings illustrate, Gen Zers — despite rising home prices — make up a noteworthy share of homebuyers in many of the nation’s largest metros. While the results don’t undercut how difficult it can be to buy a home — especially in today’s hot housing market — they do help dispel the myth that homeownership is impossible for all young Americans.

Of course, our findings don’t mean that the future of homebuying will be smooth sailing for Gen Zers. In fact, because mortgage rates have risen dramatically since the start of the year while home prices have remained high, it’s likely that many would-be young buyers will find that purchasing a house is considerably more difficult this year than it would have been in 2021 and 2020, when rates were at or near record lows. This is especially true among Gen Zers, many of whom don’t earn especially high incomes because they’re just graduating college and starting their careers.

Owing to these challenges, many Gen Zers may consider cheaper alternatives to homebuying like renting or living with family.

Fortunately, while these more affordable options may be more appealing for the time being, Gen Zers will likely have more opportunities to become homebuyers over the coming years as their earnings increase and a greater supply of housing hits the market and brings prices down.

Tips for Gen Z homebuyers

Rising rates, increasing home prices and low housing inventory have made homebuying more difficult for many Gen Zers. But that doesn’t mean homebuying is an impossible goal for members of that generation.

Here are three tips that can help Gen Zers make the homebuying process more manageable:

  • 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 to make a purchase. By focusing on paying down other debts before looking for a home to purchase, Gen Zers can boost their credit scores and free up extra cash that can go toward a home.
  • Shop around for a mortgage. Shopping around for a mortgage before buying a home can help borrowers find a better mortgage rate — which can lower their monthly payments — and help them figure out how much money they’ll qualify for and how expensive a house they’ll be able to afford.
  • Consider first-time buyer programs. There are various programs available to first-time homebuyers to make homeownership a more achievable goal for those with smaller down payments and lower credit scores. These programs are especially useful to Gen Zers, many of whom are first-time buyers.

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 offers given by LendingTree to adult Gen Z borrowers (18 to 24) as a percentage of the total number of offers given to borrowers ages 18 to 80. The larger the share of requests from Gen Zers, the higher ranking a metro received.

Borrower data was derived from mortgage offers given to more than 890,000 users of the LendingTree mortgage shopping platform across the nation’s 50 largest metros from Jan. 1, 2021, to Dec. 31, 2021.

 

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