Gen Z Home Buyers’ Top Housing Markets

A new generation of home buyers

Gen Zers are growing up. The age group — those born between 1997 and 2012 — are reaching typical home buying years and entering the housing market.

In this environment of high prices, low inventory, and intense competition, new home buyers need to find the right opportunities. A report from Point2 Homes ranked the 100 largest cities in order of which gave Gen Z the best chances of purchasing property.

These metro areas offer relative affordability, slower sales pace, higher amounts of listings, and more.

Look to the South and Midwest

Inflated prices and few for-sale options permeate most of the U.S. housing market. Finding an oasis of affordability could be a challenge.

This can especially be true for prospective Gen Z home buyers, the latest age demographic entering the fray. Those looking to become homeowners could find better opportunities across the South and Midwest, according to Point2 Homes.

“Perhaps more than the generations before, Gen Z home buyers need homes that won’t break the bank but still offer great bang for their buck. To improve their chances of becoming young homeowners, it’s important to focus on improving their credit scores as early as possible,” said Alexandra Ciuntu, Creative Writer at Point2.

“Considering their personal debt load, a young buyer will have to figure out a budget that makes sense for them – not just for the home cost, but for additional expenses like closing costs, subsequent fees, and, of course, a down payment. To that end, researching homes is as important as researching financial help home programs – There are state and local programs that can help young buyers qualify for payment assistance.”

Fort Wayne, Ind., Corpus Christi, Texas, and Detroit, Mich., received the highest scores in the country for Gen Z home buyers.

Point2 deduced the scores for each city based on seven weighted metrics, using a mix of internal data, government sources, public records, and third-party industry reports. Those metrics include home price-to-income ratio, median sale price difference, inventory, shares of homes sold above listing price, days on market, homeownership rate, and unemployment rate.

“The reality is that not many aspiring young buyers can plan beyond the here-and-now,” Ciuntu continued. “But in an ideal housing market, Gen Z should think long-term and focus on buying a home that will appreciate in value over time. A sustainable living space that can flex and adapt to ever-changing needs can be a great home, and an even greater investment. Therefore, assessing their financial situation, conducting thorough market research, and carefully planning for the future can help Gen Z make informed decisions on their way to homeownership.”

Below are the top 12 housing markets giving Gen Z the best chances at homeownership, according to Point2’s scoring system:

12. Orlando, Florida

Score: 72.23
Home price-to-income ratio: 8.5
Inventory (per 10,000 residents): 80.2
Days on market: 23
Gen Z unemployment rate: 3.6%

11. Indianapolis, Indiana

Score: 72.28
Home price-to-income ratio: 5.9
Inventory (per 10,000 residents): 27.0
Days on market: 19
Gen Z unemployment rate: 7.2%

10. Scottsdale, Arizona

Score: 72.53
Home price-to-income ratio: 13.4
Inventory (per 10,000 residents): 62.4
Days on market: 39
Gen Z unemployment rate: 3.5%

9. Aurora, Colorado

Score: 72.78
Home price-to-income ratio: 8.3
Inventory (per 10,000 residents): 30.7
Days on market: 27
Gen Z unemployment rate: 6.0%

8. Fort Worth, Texas

Score: 73.18
Home price-to-income ratio: 7.9
Inventory (per 10,000 residents): 44.1
Days on market: 41
Gen Z unemployment rate: 6.1%

7. Durham, North Carolina

Score: 73.48
Home price-to-income ratio: 6.4
Inventory (per 10,000 residents): 32.3
Days on market: 38
Gen Z unemployment rate: 1.5%

6. Lincoln, Nebraska

Score: 75.18
Home price-to-income ratio: 6.9
Inventory (per 10,000 residents): 22.4
Days on market: 21
Gen Z unemployment rate: 4.0%

5. Memphis, Tennessee

Score: 77.00
Home price-to-income ratio: 5.3
Inventory (per 10,000 residents): 26.8
Days on market: 46
Gen Z unemployment rate: 8.1%

4. Laredo, Texas

Score: 78.70
Home price-to-income ratio: 6.1
Inventory (per 10,000 residents): 21.9
Days on market: 73
Gen Z unemployment rate: 7.9%

3. Detroit, Michigan

Score: 80.53
Home price-to-income ratio: 3.1
Inventory (per 10,000 residents): 42.7
Days on market: 38
Gen Z unemployment rate: 11.0%

2. Corpus Christi, Texas

Score: 80.55
Home price-to-income ratio: 4.5
Inventory (per 10,000 residents): 44.2
Days on market: 44
Gen Z unemployment rate: 7.8%

1. Fort Wayne, Indiana

Score: 84.20
Home price-to-income ratio: 4.8
Inventory (per 10,000 residents): 23.9
Days on market: 15
Gen Z unemployment rate: 4.1%

Tougher housing markets for Gen Z

If you’re looking to boost your chances at homeownership, maybe shy away from California. The Golden State has seven of the eight hardest Gen Z housing markets and 12 in the top 20.

Below are the 20 worst cities for Gen Z home buyers, featuring combinations of low affordability, higher competition and a dearth of supply:

The bottom line

Younger generations are facing higher difficulties with housing costs and finding homes to buy.

Fortunately, some housing markets are more conducive to Gen Z homeownership. But if your city didn’t make the list or is generally more expensive, you should know how to shop for interest rates and negotiate with the seller.

If you’re ready to begin your path to homeownership, talk to a local lender today.