(NEXSTAR) – A new study of mortgage applications in the country’s 50 largest metro areas has revealed where Gen Z homebuyers are looking to put down roots.
The study, which analyzed mortgage requests among 18–27-year-olds who used the LendingTree platform in 2024, found that members of Gen Z are filing for a larger share of applications in mostly Midwest metro areas — with Grand Rapids, Michigan, topping the list: Gen Z applicants using LendingTree accounted for just over 31% of the mortgage requests in the West Michigan metro.
Coming in at No. 2 was Salt Lake City, with 24.79% of LendingTree applicants being between 18 and 27. Milwaukee boasted the next-largest share of Gen Z applicants, with 24.33%.
Metro areas in Minnesota, Ohio, Indiana and Missouri were also among those with relatively large shares of young mortgage applicants.
Top 10 metro areas popular with Gen Z home-seekers
- Grand Rapids, Michigan: 31.45%
- Salt Lake City, Utah: 24.79%
- Milwaukee, Wisconsin: 24.33%
- Minneapolis, Minnesota: 23.93%
- Cincinnati, Ohio: 23.80%
- Indianapolis, Indiana: 23.30%
- Buffalo, New York: 23.18%
- Louisville, Kentucky: 22.84%
- Kansas City, Missouri: 22.63%
- Columbus, Ohio: 22.39%
The reason for a larger concentration of younger homebuyers in the Midwest, in particular, is simple, according to LendingTree finance analyst Matt Schulz: They’re more affordable areas.
“Grand Rapids and Milwaukee are relatively average cost-of-living areas where homeownership may not be out of the question for younger people,” Schulz said. Salt Lake City ranked second, he said, because of a “thriving tech scene and booming economy,” which brought higher-paying jobs to younger workers.
A recent Redfin analysis of affordable metro areas for homebuyers also found that median home prices in several Midwest cities — specifically Detroit, Cleveland and Dayton — were among the lowest in the country.
On the other end of the spectrum, LendingTree observed the lowest share of Gen Z mortgage applicants in San Francisco (where Gen Z applicants accounted for only 9.68% of requests) and several other California metros, among cities in Nevada, New York and Florida.
Metro areas with the smallest share of Gen Z home-seekers
- San Francisco, California: 9.68%
- San Jose, California: 11.31%
- Las Vegas, Nevada: 12.07%
- Los Angeles, California: 13.17%
- New York, New York: 13.54%
- Sacramento, California: 13.73%
- Riverside, California: 13.98%
- Miami, Florida: 14.20%
- San Diego, California: 14.80%
- Orlando, Florida: 15.06%
The findings appear to line up with recent upward trends in real estate prices, too. A recent Zillow study found that California has the largest share of cities with “starter” homes priced at $1 million or above, followed by New York, New Jersey and Florida.
Recent data from Realtor.com also found that today’s homeowners would need to earn $47,000 more than they did six years ago just to afford a home at the median U.S. listing price. In several metro areas, including San Francisco, Los Angeles, New York and Boston, the annual income needed to afford a median-priced home tops $200,000. In San Jose, it’s more than $370,000.
“The cost of buying a house is just so high that many young people see it as a pipe dream,” Schulz said of LendingTree’s findings.
A full list of 50 metro areas ranked according to the share of mortgage requests from Gen Z applicants can be found at LendingTree.com.
It’s not all bad news, though. Home prices appear to be rising more slowly than during the pandemic, and buyers may now have a wider selection of properties to look at.
As properties take longer to sell, more sellers might also be reducing their asking price. Some 18% of listings had their price reduced last month, according to Realtor.com.
“Sellers are becoming more flexible on pricing, underscored by the price reductions we’re seeing, and while higher mortgage rates are certainly weighing on demand, the silver lining is that the market is starting to rebalance,” said Danielle Hale, chief economist at Realtor.com. “This could create opportunities for buyers who are prepared.”
The Associated Press contributed to this report.