Gen Z more than doubles its presence in housing market, study finds

The number of entry-level houses shrunk by 18% in the past year, but the youngest home-buying generation isn’t shying away from house hunting.

Generation Z – the oldest of which are turning 23 this year – represented about 2% of all new mortgages in December, growing 150% from a year earlier, according to a new study by

While still a small share, the Gen Z’s mortgage growth is fastest among all the generations and its share is about the same as the silent generation.

“What we’ve done is detected their entrance into the market,” said Javier Vivas, director of economic research at “That’s important because once the generation enters the market, their footprint expands quickly.”

Prospective home buyer Jessica Doctoroff (C) visits a condominium for sale with her real estate agent Brenda Bremis in Medford, Massachusetts April 2, 2009.  Pending sales of existing U.S. homes rose modestly in February but the market is still weak in the face of continued declines in home values and a recession, according to the National Association of Realtors Pending Home Sales Index     REUTERS/Brian Snyder    (UNITED STATES)
Turning 23 In December, Gen Z represented about 2% of all new mortgages in the past year, according to (REUTERS/Brian Snyder) noted a similar trend among younger homebuyers. The number of Gen Zers applying for a mortgage jumped 675% in the past year, outpacing the 250% increase among millennials, according to public relations head, Tanya Hayre.

Gen Z spending power

Gen Zers entering the workforce are earning a median of $616 a week, or $32,032 a year as of the end of 2019, 30.5% more than millennials made at the beginning of 2009 when they were 20 to 24, according to data from the Bureau of Labor Statistics.


“I think compared to how millennials were starting out, they’re in a better financial position,” said Daryl Fairweather, chief economist at Redfin, an online real estate marketplace.

Still, Gen Z can only shell out a median of $160,600 for a home, lower than the national median home value of $244,054 according to Zillow, and lower than the $256,500 that millennials are willing to spend, according to Lower-priced homes are also the scarcest.

That limits Gen Z to mostly low-cost areas in the South and Midwest.

A view of the HCR ManorCare (R) and ProMedica (2nd L) headquarter buildings in Toledo, Ohio, U.S., May 14, 2018. Picture taken May 14, 2018.  REUTERS/Aaron Josefczeyk
Toledo, Ohio, is the metro where the share of new mortgages going to Gen Z is the highest at 5.35%. (REUTERS/Aaron Josefczeyk)

Toledo, Ohio, is the metro where the share of new mortgages going to Gen Z is the highest at 5.35%, according to, followed by metro area consisting of Grand Rapids, Michigan and parts of Wyoming at 4.43%.

Where else is Gen Z buying a home?

The top 10 metro areas with the highest share of Gen Z mortgage borrowers are:

  1. Toledo, Ohio: 5.35% of new mortgages

  2. Grand Rapids-Wyoming, Michigan: 4.43%

  3. Wichita, Kansas: 4.40%

  4. Virginia Beach-Norfolk-Newport News, Virginia: 4.36%

  5. Winston-Salem, North Carolina: 3.53%

  6. Scranton-Wilkes-Barre--Hazleton, Pennsylvania: 3.43%

  7. Oklahoma City, Oklahoma: 3.41%

  8. Cincinnati, Ohio-Kentucky-Indiana: 3.39%

  9. Youngstown-Warren-Boardman, Ohio-Pennsylvania: 3.32%

  10. Baton Rouge, Louisiana: 3.14%

BATON ROUGE, LA - 2011:  General view of the campus of the Louisiana State University Tigers circa 2011 in Baton Rogue, Louisiana.  (Photo by Louisiana State/Collegiate Images via Getty Images)
About 3.14% of all new mortgages in Baton Rouge, Louisiana were from Gen Z (Photo by Louisiana State/Collegiate Images)

These metro selections point to a newer housing trend: While previous generations prioritized jobs, Gen Z looks for affordability.

“Two to three years ago, housing markets were driven by jobs and where high incomes were located,” Vivas said. “The difference in the last year is that half the hottest markets are really the ones offering lower-priced inventory.”

Dhara is a writer for Yahoo Finance. Follow her on Twitter @dsinghx.

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