While affordability challenges persist, Gen Z is proving resilient, carving out traditional and non-traditional paths to homeownership — particularly in the Midwest. New data from LendingTree and CoreLogic highlights the struggles and successes of young buyers in today’s real estate landscape.
Young buyers still face an uphill battle
According to a LendingTree analysis of anonymized credit reports, only 3.1 % of Americans under 30 currently hold a mortgage in the nation’s 50 largest metro areas. The disparity in homeownership rates across cities underscores affordability concerns.
In Nashville, Tenn., 9.4% of under-30 residents have a mortgage, while in high-cost areas like San Jose, Calif., that figure drops to just 0.8%.
Home prices and mortgage rates have surged since 2021, putting additional pressure on young buyers.
Despite making up 20.3 % of the adult population in the nation’s 50 largest metros, people under 30 account for just 4.7% of mortgage holders. The highest concentrations of young mortgage holders are in Indianapolis (10.2%), Salt Lake City (9.4%), and Cincinnati (8.9%). Meanwhile, metros like New Orleans, Boston, and San Jose report less than 2.5% of mortgage holders under 30.
Generational home-buying divide
Another striking conclusion from LendingTree is the stark difference in home values sought by younger buyers compared to older buyers. On average, under-30 buyers looked at homes priced at $92,332 — 74.9% lower than the $367,681 average sought by buyers 30 and older.
“We’re currently trapped in a vicious cycle,” said Mark Bizzarro, CEO at New York-based Bizzarro Real Estate Agency. “Many people bought or refinanced at the bottom of the market after the 2006 subprime mortgage collapse, including boomers who are now ready to retire. Usually, retirees downsize and move to smaller homes or senior-living residences.
“But many boomers are aging in place, not wanting to pay today’s interest rates to move into a smaller home. That means the larger homes they live in, which are ideal for raising families, aren’t coming on the market like they usually would. As older people begin to leave their larger homes, the housing shortage should ease for younger Gen Z buyers.”
The biggest home price gaps between Gen Z and older buyers are in:
Providence, R.I.: 88.0% lower than older buyers
Charlotte, N.C.: 86.1% lower
San Francisco: 84.1% lower
The smallest price gaps occur in Buffalo, N.Y. (58.0% lower), Milwaukee (58.5% lower), and Salt Lake City (60.9% lower).
Gen Z Buyers Seek Much Less Expensive Homes
“Gen Z will spend an average of $145,000 on rent by age 30,” said Bizzarro. “In expensive places like New York or San Francisco, that average jumps to over a quarter-million dollars. Where it gets interesting is that if they buy, Gen Z will spend $165,000 on housing by age 30, including mortgage, insurance, taxes and other expenses.
“The difference is that in 15 or 30 years, the homeowner will have an asset they can sell or keep living in so they don’t have a monthly housing payment. The renter, on the other hand, will have to keep spending money and have nothing to show for it.”
Midwest leads Gen Z homeownership growth
Amid high costs, the Midwest has emerged as a stronghold for Gen Z homebuyers. According to CoreLogic’s Loan Application Database, Gen Z accounted for 13% of home purchase applications in 2024, a 3% increase from 2023.
Cities like Des Moines, Iowa, and Omaha, Neb., saw Gen Z make up 21% of home purchase applications, the highest in the nation. Other top metros for young buyers include Youngstown, Ohio (20%), Dayton, Ohio (20%), and Grand Rapids, Mich. (20%).
By contrast, Gen Z representation remains low in expensive coastal metros. In California, San Jose and San Francisco reported the lowest share of Gen Z homebuyers at just 4%, followed by Oxnard (5%). Los Angeles, urban Honolulu, and Bridgeport, Conn., each saw Gen Z account for only 6% of home purchase applications.
Non-traditional homebuying strategies
Beyond location, co-ownership is becoming increasingly common among young buyers. While many Gen Zers purchase homes as single applicants, nearly 45 b % had co-applicants in 2024, according to CoreLogic.
These co-buyers often include friends or family members, with some parents co-signing loans.
“Gen Z is becoming more excited about home buying as renting has become more expensive,” said Bizzarro. “A lot of them are beginning to realize they’re much better off paying their own mortgage than someone else’s. Agents need to expose buyers to grant programs and other money-saving opportunities. There are lots of fantastic city, state and federal programs out there. Many banks are also bringing back closing credits for purchasers. Experienced agents will get Gen Z buyers tapped into the free money that’s available.”
Looking ahead
Despite economic obstacles, Gen Z’s presence in the housing market is expected to grow in the coming years. With interest rates remaining high and inventory limited, affordability will continue to be a challenge. However, experts believe demand will persist in budget-friendly regions.
“Here in New York City and other large metro areas, the bottom line is that building or converting existing buildings to make new homes is exactly what we need,” Bizzarro said. “However, there’s not much land to build on anymore. We have to get more creative.
“A lot of the new homebuilding happening now is on land that’s been rezoned. We need to continue projects like that and expand on them. Governments need to keep looking for more areas to rezone. Several places in New York City aren’t zoned for residential, and if we rezoned them, we could build new housing to help ease demand.”
Read more at Housingwire
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