Twenty years ago, enterprising young people dreamed of living in The Big Apple or The City of Angels. Now they are settling in Salt Lake City and Louisville.
A new report from the LendingTree Loan Market reveals that Gen Z made up 10% of homebuyers in America’s 50 largest metropolitan areas last year. Their favorite cities to buy are mid-sized and inland.
From deposit to Z
The oldest members of Gen Z – those born between 1997 and 2012 – are finishing their education, leaving the nest and starting a career. But they haven’t exactly had a welcome economic introduction into adulthood, starting to work amid the biggest rise in costs in forty years.
Then you have to find accommodation. 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 home in the United States hit a record high of $391,200 in April. Gen Zers are find homes – in non-coastal towns that haven’t been gentrified into overpriced oblivion:
- At 16.6%, Salt Lake City holds the largest share of mortgages offered to Gen Zers. Louisville, with 15.9%, is second and Oklahoma City follows closely, while the coastal centers of New York (4.4%) and San Francisco (3.6%) are second to last and dead last among the 50 largest metropolitan areas in the United States.
- The difference between the average down payment of Gen Z homebuyers in New Orleans ($13,060) or Louisville ($14,268) compared to San Francisco ($42,000) or New York ($32,000 $) speaks for itself, and so do home prices: in Salt Lake, an average mortgage requested by a Gen Z homebuyer is $291,952; in San Francisco, it’s $408,000.
“While the results don’t reduce how difficult it can be to buy a home…they help dispel the myth that home ownership is impossible for all young Americans,” writes Jacob Channel, senior economist by LendingTree.
Loan at maturity: The average Gen Z home buyer in San Francisco has a credit score of 723 — but head to Louisville, Indianapolis or Birmingham, Alabama, and it’s just 699.