The ten places currently offering promise to Gen Z homebuyers: analysis

(NEXSTAR)-With mortgage rates and housing prices surging, Generation Z has found that house shopping has been an American nightmare in recent years. However, in some areas, hope may bloom again in 2024.

According to a recent Point2Homes report, Gen Z buyers may have the best chance of becoming homeowners in the South and Midwest since they are more likely to have entry-level wages and no home equity.

Using a weighted score based on seven metrics—home price-to-income, median sale price difference in 2023 vs. 2022, inventory, homes sold over listing, days on market, homeownership rate, and unemployment rate—the study ranked the 100 largest cities in the nation.

The study’s author observes that “despite Gen Z’s relative youth in the housing market, their distinct lived experiences have already caused their homebuying patterns to diverge from those of older generations.” “Having grown up in the midst of a worldwide crisis, kids are more concerned with their well-being and following their instincts. Furthermore, stability earlier in life—as opposed to, say, millennials at the same age—feels good for a lot of people.

Fort Wayne, Indiana, received the greatest rating among the cities most popular with Generation Z homebuyers. It was followed by Corpus Christi, Texas; Detroit, Michigan; Laredo, Texas; Memphis, Tennessee; Lincoln, Nebraska; Durham, North Carolina; Fort Worth, Texas; Aurora, Colorado; and Scottsdale, Arizona.

Fort Wayne’s low unemployment rate among Gen Zers and home price-to-income ratio helped it reach the top spot.

The study also revealed that prospective Gen Z homeowners in California’s coastal states might want to think twice before making a purchase because the Golden State is home to seven of the ten “most difficult” cities for this generation (Fremont, San Diego, San Jose, Riverside, Los Angeles, Sacramento, and Chula Vista, respectively).

But it’s not limited to California. Lexington, Kentucky, is the third hardest place for Generation Z to buy a home in, according to the report, due to a combination of low inventory, significant unemployment among those under 25, and low median income.

The process of purchasing a home has been simpler for baby boomers who already own equity in another property, but the market isn’t very appealing to any generation due to rising mortgage rates.

Experts predict that in 2024, this might shift, but don’t expect to see rates as low as they were in 2020 and 2021.

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