Young adults are buying more homes than the generations before them did in their 20s, a new report from Redfin revealed.
Generation Z homebuyers ages 19 to 25 have a higher homeownership rate than millennials and Gen Xers when they were the same age.
“First-time buyers aren’t as spooked by high rates as people who are trying to move up to a bigger or better home,” said Antonia Ketabchi, a Redfin Premier agent in Maryland. “High costs are still a challenge, but younger people are excited about the fact that they’re looking to buy their first home, and they’re not locked in by a low mortgage rate because until now they’ve been renting. Plus, they weren’t in the market three years ago when mortgage rates were sitting under 3%, so they don’t have an ultra-low point of comparison.”
Two in five (39.7%) new mortgages issued in 2023 went to homebuyers under 35, and 26.5% went to buyers aged 35-44, according to Redfin's analysis of Home Mortgage Disclosure Act (HMDA) data, excluding second homes and investment properties. Next came 45-54 year olds, who took out 16.1% of new mortgages, 55-64 year olds (10.8%), and 65-74 year olds (5.4%).
The median age of first-time U.S. homebuyers is 35. Just over one quarter (26%) of adult Gen Zers owned their home in 2023, and 55% of millennials owned theirs. That’s compared to a homeownership rate of 72% for Gen Xers, and 79% for baby boomers.
Regionally, Gen Z and young millennials made up the highest share of homebuyers in relatively affordable Rust Belt metros in 2023. Nearly half (48%) of new mortgages issued in Pittsburgh went to buyers under 35, the highest share of the 50 most populous U.S. metros. That was followed by Cincinnati (46.5%), Philadelphia (46.3%), Detroit (46.1%) and Warren, Mich. (46%).
More popular with retired people and “snowbirds” was Florida, where buyers under 35 ate up the smallest piece of the mortgage pie last year. The smallest share of homebuyers under 35 by U.S. metros analyzed went to West Palm Beach, with just 27.8% of new mortgages issued to younger folks there. This was followed by Fort Lauderdale (28.8%), Anaheim, Cal. (31.7%), Orlando, Fla. (32%), and Las Vegas (32.9%).
Older millennials took out the biggest share of mortgages in the Bay Area, with 37.8% of new mortgages in San Francisco last year issued to 35-44 year olds, followed by Oakland (37.2%) and San Jose (37.1%). Next came Newark, NJ (34.5%) and Los Angeles (34.5%).
On the other end of the spectrum, buyers aged 35-44 took out the smallest share of mortgages in Cleveland (23.4%), Detroit (23.4%), Cincinnati (23.7%), Phoenix (23.8%) and Warren, Mich. (23.9%).
