Gen Z homebuying havens: Fascinating study reveals cities where young Americans stand a chance of owning property

Younger Americans are more likely to be able to buy in the South and MidwestHomeownership is the least likely for Gen Z in California, the study found Soaring homebuying costs have priced many young people out of the market

Amid high mortgage rates, rising property prices and a turbulent economy, young Americans are facing one of the most difficult housing markets in recent memory.

Soaring inflation over the last few years has taken its toll, pricing many people out of the housing market entirely.

But it is not all bad news – a new study has revealed the cities where Gen Z stand a chance of owning a home.

Analysis by listings site Point2 found that Gen Z – which is characterized as Americans who were born between 1997 and 2012 – were more likely to be able to afford property in the South and Midwest.

In particular, it ranked Fort Wayne, Indiana, and Corpus Christi, Texas, as cities which could provide a window of opportunity for young Americans hoping to buy.

Analysis by listings site Point2 found that Gen Z were more likely to be able to afford property in the South and Midwest

Your browser does not support iframes.

To assess how feasible it was for Gen Z Americans to buy property in certain areas, Point2 ranked 100 major cities based on several metrics.

It analyzed how many household incomes – where the homeowner is under 25 – would be needed to reach the median home price in a market, how much average house prices went up from 2022 to 2023, and how many homes were for sale in the area.

It also took into account how many homes sold above their listing price and how quickly they were snapped up – to assess competitivity in the market.

The study also considered the unemployment rate and homeownership rate in each city.

Fort Wayne, which is the second largest city in Indiana, topped the list for prospective Gen Z homeowners mainly due to its home price-to-income ratio and low unemployment rate, the study found.

Corpus Christi, Texas, which is located on the Gulf of Mexico, also has a low home price-to-income ratio, where homes cost less than 5 times Gen Z’s median income.

Third on the list is Detroit, Michigan, where Gen Z homeownership is among the best in the country at 16.7 percent, according to Point2.

Rounding off the top 10 cities were Laredo, Texas, Memphis, Tennessee, Lincoln, Nebraska, Durham, North Carolina, Fort Worth, Texas, Aurora, Colorado and Scottsdale, Arizona.

In these cities, young buyers can be beckoned by home prices which are less than or around 10 times their median income.

Homeownership is much less attainable in Irvine, California, for example, where house prices are almost 33 times the median Gen Z income – the highest of any city in the study.

While California’s red-hot housing market provides barriers to Gen Z Americans looking to buy, Texas is home to three cities where they would have a shot at getting on the property ladder, according to Point2.

Corpus Christi, Laredo, and Fort Worth are home to somewhat affordable prices – below $350,000 – and not many homes selling above the asking price.

Laredo, which is located on the Mexican border, had zero homes sold above the asking price, according to the analysis.

Your browser does not support iframes.

It comes after a separate study released this year revealed how older Americans own twice as many homes than younger generations.

Empty-nesters are occupying roughly one-third of the three-bedroom homes in the US, while millennials with kids own just half that amount.

Baby boomers whose kids are now adults and have left home own just over 28 percent of large homes in the US and are refusing to downsize, according to a Redfin analysis.

Millennials with kids own just over 14 percent of homes in the same category, and Gen Z with children own less than one percent of the large home supply.

Experts warn that soaring homebuying costs mean younger people are missing out on $21 trillion in equity which older generations were able to build in home ownership.

Analyst Meredith Whitney, who was once dubbed the ‘Oracle of Wall Street’, warned last year how not owning homes hurts the ‘avocado toast generation.’ 

‘We are seeing record low homeownership levels for those under 38,’ she told DailyMail.com.

‘Homeownership has been a forced savings vehicle in the US, but particularly in the last 12 or 15 years, because interest rates have effectively been at zero,’ she told DailyMail.com.

‘We have seen $21 trillion of equity built up in homes over the last decade, which is obviously an incredible wealth creator. Those who have not participated in that have been those who haven’t owned homes.’

But it appears that things may be beginning to improve for prospective homebuyers going into 2024.

New figures from Government-backed lender Freddie Mac show the average rate on a 30-year fixed-rate home loan is now 6.6 percent, down from 6.66 percent last week.

Yet despite the good news, buyers still face shelling out an extra $700 a month than if they had bought two years ago.

Freddie Mac chief economist Sam Khater said Thursday: ‘This is an encouraging development for the housing market and in particular first-time homebuyers who are sensitive to changes in housing affordability.’