Gen Z Has Started Buying Homes: They Love Salt Lake City and Louisville

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.