Younger home buyers flock to Midwest, Mountain states

After peaking in 2020, the share of purchases among younger home has dropped due to ongoing affordability issues and the return of older consumers to the market, according to CoreLogic.

The percentage of home aged 30 and below fell to under 20% nationally in 2021, after approaching 22% in 2020. Seasonally adjusted numbers from the first two months of the current year show the young home-buyer share retreating even further.

“The slim supply of homes for sale is pushing up home prices,” said Archana Pradhan, principal and economist at CoreLogic in a research statement. “Since 2021, record-breaking home price growth has created affordability challenges, especially for young home .”

Gen Z and younger millennials seeking homeownership are likely to see greater opportunities away from the coasts. Markets in the and regions, w. a greater number of lower-priced properties are available, have seen a corresponding higher share of younger consumers, CoreLogic said.

Two Utah markets, Provo and Ogden, had the highest percentage of young adults under 30 applying for purchase mortgages with 37% and 35% shares of their total pool of buyers. They were followed by Grand Rapids, Michigan, and Des Moines, Iowa, w. younger consumers made 34% of purchases. Closely behind were Pittsburgh and Buffalo, New York, each with 32%. Omaha, Nebraska; Wichita, Kansas; Colorado Springs, Colorado and Cincinnati rounded out the top 10 metro areas with the highest percentage of younger home buyers.

On the other end, cities in Florida and California had the smallest percentage of purchases by buyers under 30. North Port, Florida came in at the bottom with 10%, followed by Cape Coral, Florida at 11% and Deltona, Florida with 13%. Oxnard, California and Miami rounded out the bottom five with 15% each.

During the first year of the coronavirus pandemic — when interest rates headed downward and the threat of COVID-19 discouraged many older buyers from participating in the home-buying process — younger millennial and Gen Z applicants grabbed a greater share of the purchase market. But the surge in housing costs, with consistent annual price growth of between 15% to 20% over the past 12 months, appears to be driving those numbers back down to their lowest in a decade.

While many in the housing industry expect home-price growth to ease slightly in 2022, affordability issues will remain a roadblock for many buyers. Current headwinds in the form of rising mortgage rates are only compounding the problem.

“These trends toward record-breaking home prices and increasing mortgage rates will impact potential younger homebuyers and lower-income homebuyers the most,” Pradhan said.



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