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 expensive metro areas to find more affordable homes in midsize cities, new research shows.
According to a report from LendingTree, the online lending marketplace based in Charlotte, N.C., members of Generation Z — identified by the platform as people born between 1997 and 2012 — accounted for 10 percent of home buyers across America’s 50 largest metro areas in 2021. Researchers scanned mortgage offers to more than 890,000 users of the LendingTree platform and isolated borrowers ages 18 to 24 as a percentage of the total number of offers. The larger the share of requests from Gen Zers in a particular metro, the higher its ranking.
Salt Lake City topped the list, retaining the No. 1 spot from last year, with 16.6 percent of its mortgage offers going to Gen Z borrowers. The city has finance, medical and tech industries as a draw for young professionals, said Jacob Channel, the senior economic analyst for LendingTree.
The study’s results were dominated by inland cities, as more workers abandoned coastal areas. Louisville, Ky., (at 15.9 percent) climbed into the No. 2 spot from seventh place the previous year, and Oklahoma City (15.3 percent) fell one spot into third place. At the bottom were the notoriously expensive coastal cities of San Jose, Calif. (4.5 percent), New York (4.4 percent) and San Francisco (3.6 percent).
Mr. Channel credited the advent of remote work for Gen Z’s increasing interest in smaller cities, but noted in the report that rising interest rates were making home purchases more difficult in 2022 than they would have been in previous years. Nevertheless, as these buyers become older and earn more income, they’ll exert more sway on the national housing market.
“They are starting college, starting careers, starting families,” he said. “I expect them to be a dominant force in the market in the next few decades.”
Source: | This article originally belongs to Nytimes.com
