The youngest homebuying demographic is starting to make its presence known, albeit rather slowly, according to new data from Realtor.com.
By the end of 2019, the oldest members of Gen Z will have turned 22. And while they are out in the adult world, they are not that prominent in the housing market–only two percent of this young demographic obtained mortgages in the fourth quarter of 2019.
Realtor.com warned that a lack of homes priced under $200,000 being built or available for-sale will limit the Gen Z homebuying capacity–the median purchase price of a home by Gen Z during the fourth quarter was $160,600, and the inventory of homes priced below $200,000 decreased by 18.1 percent year-over-year during December.
"Gen Z is entering the housing market under the radar, but at a projected 65-million strong, they are going to begin making some major waves," said Realtor.com Senior Economist George Ratiu. "However, as the young generation launches into homeownership, it is facing strong headwinds, including competition from millennials, many of whom are entering homeownership later in life, and a marketplace largely devoid of entry-level options."