Twenty years ago, enterprising young people dreamed of life in The Big Apple or The City of Angels. Now, they’re settling on Salt Lake City and Louisville.
A new report from lending marketplace LendingTree reveals Generation Z accounted for 10% of homebuyers in America’s 50 largest metro areas last year. Their favorite cities to buy in are mid-sized and inland.
From Downpay to Z
The oldest members of Gen Z — those born between 1997 and 2012 — are in the process of finishing up school, leaving the nest, and starting careers. But they haven’t exactly had a welcome economic introduction to adulthood, beginning work amid the highest rise in costs in forty years.
Then there’s finding a place to live. Rents in major cities have soared — according to Zumper, the median monthly rent for a one-bedroom apartment in New York City is $3,420, up 38% year over year. Buying is even more daunting: the median price of an existing US home was a record $391,200 in April. Gen Zers are finding homes — in non-coastal cities that haven’t been gentrified into outpriced oblivion:
- At 16.6%, Salt Lake City has the largest share of mortgages offered to Gen Zers. Louisville, at 15.9%, is second and Oklahoma City follows close behind, while coastal hubs New York (4.4%) and San Francisco (3.6%) are second-to-last and dead last among America’s 50 largest metro areas.
- The difference between the average down payment for Gen Z homebuyers in New Orleans ($13,060) or Louisville ($14,268) versus San Francisco ($42,000) or New York ($32,000) speaks for itself — as do home prices: in Salt Lake, an average loan requested by a Gen Z homebuyer is $291,952; in San Francisco, it’s $408,000.
“While the results don’t undercut how difficult it can be to buy a home… they do help dispel the myth that homeownership is impossible for all young Americans,” writes Jacob Channel, LendingTree’s senior economist.
Credit Where Due: The average Gen Z homebuyer in San Francisco has a 723 credit rating — but head to Louisville, Indianapolis, or Birmingham, Alabama, and it’s just 699.