Rising mortgage rates and steep home prices have been particularly challenging for first-time buyers, especially young adults earning their first paychecks. Many are looking outside the expensive metropolises to find more affordable homes in medium-sized cities, new research shows.
According to a report by LendingTree, the online loan market in Charlotte, NC, Generation Z members — identified by the platform as people born between 1997 and 2012 — accounted for 10 percent of home buyers in America’s 50 largest metropolitan areas by 2021. Researchers scanned mortgage offers to more than 890,000 LendingTree platform users and isolated borrowers ages 18 to 24 as a percentage of the total number of offers. The higher the share of Gen Zers requests in a given subway, the higher its rank.
Salt Lake City topped the list, holding the No. 1 spot from last year, with 16.6 percent of its mortgage offers to Gen Z borrowers. The city has financial, medical and technical industries as a draw for young professionals, said Jacob Channel, the senior economic analyst for LendingTree.
The results of the survey were dominated by inland cities as more workers left coastal areas. Louisville, Ky., (15.9 percent) climbed to #2 from seventh place the previous year, and Oklahoma City (15.3 percent) dropped one spot to third. At the bottom were the notoriously expensive coastal cities of San Jose, California (4.5 percent), New York (4.4 percent) and San Francisco (3.6 percent).
Mr Channel attributed the advent of remote work to Gen Z’s increasing interest in smaller cities, but noted in the report that rising interest rates made home buying more difficult in 2022 than in previous years. Nevertheless, as they grow older and earn more income, these buyers will exert more influence on the rural housing market.
“They start college, start careers, start families,” he said. “I expect them to be a dominant force in the market for decades to come.”
