America’s youngest generation is taking on mortgages.

According to online loan marketplace, Lending Tree, Gen Zers – despite pandemic graduations, student loan debt, and economic hurdles – last year made up nearly 15 percent of potential homebuyers across the nation’s 50 largest metro areas.

Additionally, another survey revealed that nearly 72 percent of those born between 1997 and 2012 plan to buy their first home within one to six years, while 37 percent of Gen Zers plan to buy within one to three years – numbers that far outpace the 28 percent rate for millennials when they were that age.

At least part of the reason has to do with the timing of when Gen Z entered the labor market, according to Economist Daryl Fairweather.

“The 2008 recession made it harder for millennials to establish themselves financially,” he said, “While Gen Zers benefited from a labor market that bounced back with a vengeance after the early days of the pandemic.”

Additionally, being able to work remotely has not only made homeownership more attractive to this generation, but it has also made it possible for many to relocate to affordable cities of their choice.

While Gen Z mortgage requests last year made up less than 10 percent of all requests in cities like New York, San Francisco and Los Angeles, reported Lending Tree, they accounted for 20 percent of requests in more affordable places like Salt Lake City, Oklahoma City, Birmingham, Indianapolis, Cincinnati, and Louisville as well as in Minneapolis, Nashville, St. Louis and Kansas City, Mo.

A report by the National Association of REALTORS® (NAR) notes that Gen Z made up only 4 percent of those who closed on a home in 2022 – and there is no question that rising interest rates, student debt and slow construction are putting ownership out of reach for some.

Yet, of those buyers who closed on a home, 49 percent reported they had owned a previous home and 10 percent said they were buying homes for a multi-generational household. For agents in affordable markets, especially, this is a demographic well worth pursuing.

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This material is meant for general illustration and/or informational purposes only. Although the information has been gathered from sources believed to be reliable, no representation is made as to its accuracy. This material is not intended to be construed as legal, tax or investment advice. You are encouraged to consult your legal, tax or investment professional for specific advice

 About Bobbi Pronin

Bobbi Pronin is an award-winning writer based in Orange County, Calif. A former news editor with more than 30 years of experience in journalism and corporate communications, she has specialized in real estate topics for over a decade.

Bobbi is not an employee of Anywhere Integrated Services or affiliated with its title companies.

Sources:

Lending Tree, as reported in the New York Times, June 15, 2023

Rocket Mortgage, as reported online June 22, 2023

Business Insider, 4/21/23

Axios Update on Gen Z and Homeownership, 6/23/23