U.S. Markets closed

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

Dhara Singh
Reporter

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 Realtor.com.

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 Realtor.com. “That’s important because once the generation enters the market, their footprint expands quickly.”

Turning 23 In December, Gen Z represented about 2% of all new mortgages in the past year, according to Realtor.com (REUTERS/Brian Snyder)

Better.com 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 Realtor.com. Lower-priced homes are also the scarcest.

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

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 Realtor.com, 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%

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.

Read more:

Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, SmartNews, LinkedIn, YouTube, and reddit.

  • Take Buffett’s Advice: 5 Vanguard Funds to Buy
    Business
    InvestorPlace

    Take Buffett’s Advice: 5 Vanguard Funds to Buy

    Specifically, he recommended that the cash left to his wife be invested 10% in short-term government bonds and 90% in a very low-cost S&P 500 index fund. Not just any index fund mind you, but a Vanguard fund in particular. Entertainment Stocks to Buy to Escape Holiday Blues Whether it be exchange-traded funds (ETFs) or mutual funds, the Oracle of Omaha believes Vanguard funds are the way to go.

  • Here are Warren Buffett's top 15 stock holdings
    Business
    Yahoo Finance

    Here are Warren Buffett's top 15 stock holdings

    Some of the top holdings include American Express (AXP), Apple (AAPL), Bank of America (BAC), and Delta Airlines DAL , according to Buffett's widely-read annual letter. Buffett wrote that he doesn't view these investments as "stock market wagers — dalliances to be terminated because of downgrades by 'the Street,' an earnings' miss,' expected Federal Reserve actions, possible political developments, forecasts by economists or whatever else might be the subject du jour." Rather than stock holdings, Buffett views these as companies Berkshire Hathaway "partly owns."

  • Business
    Barrons.com

    If Coronavirus Is Killing Fewer People Than the Flu, Why Has Beijing Quarantined Millions?

    China's Leaders on the Hot Seat Market Intelligence Report by TIS Group Feb. 21: Over the past several days, we have detailed some, though not all, of the actions being taken by China's government to control the coronavirus outbreak. I was told today that roughly 50,000 people die in China each year from the flu. If the coronavirus is just another flu-like virus and the current death toll really is about 2,000, not 50,000, why then has Beijing locked down 750 million people?

  • 10 Dividend Stocks to Buy That Are Off to a Fast Start in 2020
    Business
    InvestorPlace

    10 Dividend Stocks to Buy That Are Off to a Fast Start in 2020

    Year Total Return – 7 Dividend Stocks to Buy While the performance of the seven dividend stocks managed to beat the Morningstar US Market Total Return Index by 480 basis points over the past year, I think I can do better. That said, I wouldn't have a problem if you went with the seven stocks listed above. They're all outstanding long-term holds.

  • Buffett defends stock investments
    Business
    Reuters Videos

    Buffett defends stock investments

    Warren Buffett's company provided disappointing returns to shareholders last year, but on Saturday, the billionaire investor vigorously defended Berkshire Hathaway's move to invest heavily in stocks of companies like Apple. In his closely scrutinized annual letter to shareholders, the man known as the "Oracle of Omaha" for his investing prowess called stocks a far better bet than low-yielding bonds in light of low rates for interest and corporate taxes. He said he would prefer buying whole companies but argued that stocks often are the better bet.

  • 7 Tarnished Blue-Chip Stocks to Ditch Now
    Business
    InvestorPlace

    7 Tarnished Blue-Chip Stocks to Ditch Now

    S&P 500 Stocks to Buy Increasing Their Dividends in 2020 The combination of macro risks and tarnished brands suggests that investors might want to drop seven of the following stocks. Blue-Chip Stocks to Sell: Wells Fargo (WFC) Wells Fargo (NYSE:WFC) is in the news after U.S. regulators are fining eight former executives over the account scandal. Four years ago, the bank pressured employees to meet difficult sales targets.

  • Bernie Sanders possibly running against President Trump is starting to scare investors: strategist
    Politics
    Yahoo Finance

    Bernie Sanders possibly running against President Trump is starting to scare investors: strategist

    There is a growing undercurrent in markets that say a battle this fall between self-described socialist Senator Bernie Sanders and President Donald Trump could be bad news for stock prices. As evidenced by the market's strong run-up in 2020, investors have yet to exit stocks on fears of a big government Bernie winning the Oval Office. But his continued strong showing in debates and national polls may lead to some profit-taking sooner rather than later.

  • Morgan Stanley is paying $2,500 per customer for E-Trade. You can earn a $3,500 sign-up bonus for signing with a new broker — with one major catch
    Business
    MarketWatch

    Morgan Stanley is paying $2,500 per customer for E-Trade. You can earn a $3,500 sign-up bonus for signing with a new broker — with one major catch

    If the latest Wall Street mega-deal doesn't make you want to switch online brokerage accounts for a lucrative sign-up bonus, maybe it should. Wall Street giant Morgan Stanley announced an agreement Thursday to pay $13 billion to acquire the online brokerage E-Trade which has 5.2 million customer accounts. “The combination will significantly increase the scale and breadth of Morgan Stanley's Wealth Management franchise, and positions Morgan Stanley to be an industry leader in Wealth Management across all channels and wealth segments,” Morgan Stanley said in a statement.

  • Business
    Bloomberg

    Tesla Rival Sets Out to Banish 160-Year-Old Lead Tech From Cars

    These may help eliminate lead-acid batteries, a piece of technology invented in 1859 that still lurks under the hoods of Teslas in addition to the main lithium-ion power source. Supercapacitors have some way to go before they are widely adopted. There is still a gap with the popular lithium-ion units on how much energy they can store, Skeleton Chief Executive Officer Taavi Madiberk admits.

  • Here’s the reason Americans are saving so much of their income
    Business
    MarketWatch

    Here’s the reason Americans are saving so much of their income

    U.S. household wealth compared to income is near a record high. In the fourth quarter, savings as a percent of disposable income was 7.7%, more or less the post-crisis average. Some of the explanation can be boiled down to: Goldman's clients.

  • Why Luckin Stock Is Brewing to Be a Buy No Matter What
    Business
    InvestorPlace

    Why Luckin Stock Is Brewing to Be a Buy No Matter What

    And right now, LK stock is brewing nicely on the price chart and readying to be served. Let me explain. In the day-to-day goings on of Wall Street, there's always something meant to distract and keep investors occupied.

  • Warren Buffett Flashes ‘Urgent’
    Business
    Bloomberg

    Warren Buffett Flashes ‘Urgent’

    It's evolved over time into what reads like a love letter to shareholders, to insurance float — the lucrative gift that keeps on giving at Berkshire — and to America as a whole, while taking the occasional jab at Wall Street's fee-giddy bankers and anyone who thinks Ebitda is an honest profit gauge. Berkshire had $128 billion of cash as of December, about the same level as the previous quarter and many billions more than Buffett would like to see sitting in a bank. The letter, one of two major yearly events for Berkshire investors and Buffett groupies (the other is the shareholder meeting each May) has become more condensed in recent years.

  • Business
    Investopedia

    5 Takeaways From Warren Buffett's Annual Letter

    But the opportunities to make major acquisitions possessing our required attributes are rare. "In reviewing my uneven record, I've concluded that acquisitions are similar to marriage: They start, of course, with a joyful wedding--but then reality tends to diverge from pre-nuptial expectations." "Charlie and I long ago entered the urgent zone [regarding age].

  • How Does My Spousal Social Security Benefit Work?
    Politics
    Investopedia

    How Does My Spousal Social Security Benefit Work?

    If you have never worked or paid Social Security taxes (or not paid them for long enough), you will not be eligible to receive Social Security retirement benefits on your own account. You will also be able to apply for Medicare at age 65 as long as your spouse is at least 62. If you apply before you have reached full retirement age and your own benefit is larger, you will automatically be paid that amount.

  • Warren congratulates Sanders on NV, hits Bloomberg
    Politics
    Associated Press Videos

    Warren congratulates Sanders on NV, hits Bloomberg

    Speaking to a crowd of thousands in Seattle, Elizabeth Warren congratulated Bernie Sanders on his victory in Nevada's caucuses and thanked the state for keeping her in the game. She also took on her newest Democratic opponent, Mike Bloomberg. Feb.

  • FuelCell Energy Is Still a Gamble Despite New ‘Powerhouse’ Strategy
    Business
    InvestorPlace

    FuelCell Energy Is Still a Gamble Despite New ‘Powerhouse’ Strategy

    Smaller fuel cells are used to power warehouse forklifts, but FCEL is not in that business. Fuel cell companies are constantly seeking sustainable niches for a product that seems too good to be true. The problem has always been that the main source of hydrogen was natural gas, an unsustainable fossil fuel.

  • Business
    Barrons.com

    Virgin Galactic Stock Is on a Tear. This Other Asset Is Doing Even Better.

    Instead of buying stock from another holder when exercising a call option, a warrant holder will buy shares from the company, in this case Virgin Galactic. The company will take the cash from the warrant holder and issue new shares. It's one way for a company to raise capital.

  • Alibaba Is the Best Contrarian Coronavirus Pick Now
    Business
    InvestorPlace

    Alibaba Is the Best Contrarian Coronavirus Pick Now

    The coronavirus from China has dominated the headlines so far this year as Beijing struggles to get a handle on its spread. The wider market has largely written it off, but Chinese stocks have seen investor sentiment drop. While it's true that the coronavirus is likely to dent China's economy and create challenges for its businesses, there are a handful of contrarian plays that make great buy-the-dip-candidates now.

  • 3 Monster Growth Stocks Primed for Further Gains
    Business
    TipRanks

    3 Monster Growth Stocks Primed for Further Gains

    As Wall Street observers gauge the strength of a particular investment opportunity, often, they will filter out the noise and instead, concentrate their attention on its long-term growth prospects. Setting out on our own search, we used TipRanks' Stock Screener tool to pinpoint 3 stocks that have earned “Strong Buy” consensus ratings from the analysts and boast substantial upside potential from current levels. Selecta Biosciences believes that its ImmTOR immune tolerance platform can help patients fight rare diseases.

  • The Wait for China to Shake Off Virus Nears Key Moment: Eco Week
    Business
    Bloomberg

    The Wait for China to Shake Off Virus Nears Key Moment: Eco Week

    In more conventional economic matters, policy makers from the U.K., Canada, Europe and the U.S. give speeches that may give clues into their view of the global outlook, while the world's biggest economy publishes personal spending data. Here's what happened last week and below is our weekly wrap of what else is going on in the world economy this week. Asia As the coronavirus's spread continues to overshadow the region, China will release PMI data on Saturday that will give the first official read on how badly the world's second-largest has been hit.

  • I’m 40, will get a pension and have $60,000 saved for retirement. Should I borrow from it to pay off $17,500 in credit card debt?
    Business
    MarketWatch

    I’m 40, will get a pension and have $60,000 saved for retirement. Should I borrow from it to pay off $17,500 in credit card debt?

    At that time, I will have 30-plus years on the job with a pension giving me 70% of my current income with a cost-of-living annual percentage increase around 2% or 3%. Is it a good idea to borrow from your 457(b) plan to pay off credit card debt? You're not alone in your struggle with credit card debt: More than half (55%) of U.S. adults who have credit cards say they also have debt, a survey from CNBC and Morning Consult revealed in 2019.

  • ‘Overprotected’ investors could get stung in the next recession, warns top Barclays strategist
    Business
    MarketWatch

    ‘Overprotected’ investors could get stung in the next recession, warns top Barclays strategist

    Rattled by rising non-China coronavirus cases — notably in South Korea — investors appear unwilling to load up on stocks heading into the weekend. Welcome to the world of helicopter investing and our call of the day from Barclays Wealth Management's chief investment officer William Hobbs, who finds overly anxious investors living in the “long shadow” caused by the financial crisis. “The most common narrative in markets is what to do when the next recession comes along — own Treasurys, own gold, own quality to such an extent that my concern would almost be that if the next recession is of a more normal variety, such as a stock retracement of 10% to 15% and moderate declines in unemployment, you'll find that you have overprotected yourself and the underperformance could actually be in the areas which you thought were giving you safety,” Hobbs told MarketWatch.

  • Will Nokia Stock Rebound in 2020? 4 Things Investors Should Know
    Business
    InvestorPlace

    Will Nokia Stock Rebound in 2020? 4 Things Investors Should Know

    It's been a rough year for the Finnish telecommunications company Nokia (NYSE:NOK). Nokia also suspended its dividend so it could focus more on investing in 5G networks. One of the biggest things Nokia has going for it right now is the backlash against the Chinese technology company Huawei.

  • 3 Marijuana Stocks Poised to Lead a Sector Rebound
    Business
    TipRanks

    3 Marijuana Stocks Poised to Lead a Sector Rebound

    As the Canadian cannabis market continues to fail to meet sales projections, the licensed producers (LPs) with the best balance sheets are poised to lead a market rebound. With both Aurora Cannabis and Tilray implementing restructurings, the industry could see a void in certain markets providing opportunities for companies with the ability to fund growth initiatives. Based on the Aurora restructuring, the company is exiting several international markets along with shifting a focus to a value brand.

  • Undervalued Intel Stock Could Hit $75 By Year’s End
    Business
    InvestorPlace

    Undervalued Intel Stock Could Hit $75 By Year’s End

    S&P 500 Stocks to Buy Increasing Their Dividends in 2020 However, that may expand with better earnings growth. We must also consider that analysts haven't priced in much growth in recent years. But that's quickly changing as well.