One in 5 US homes is now owned by an investor who rents it out. The first time in US history. The percentage is higher in high-growth areas like Miami and Austin. Lower is the Midwest.
For Gen Z the risk is that these investors, most of whom have 2+% mortgages that mature in the next 36 months get forced to sell (since the new higher interest rates don't support the underlying rents). Ergo if a large number of homes are being dumped by desperate sellers could that cause a reset of sky-high home prices? No...why worry about that? Relax! It's only money!
Gen Z is jumping into the housing market wherever they can afford it
Record high housing costs and still-elevated mortgage rates have frozen some parts of the housing market. But younger generations haven’t given up on their homeowning dreams entirely — instead, Gen Z is just jumping into the housing market wherever they can afford to do so.
As reported by Axios over the weekend, Zoomers took up 13% of US home purchase applications in 2024, up from 10% the year before, according to new data from property information service CoreLogic. Indeed, Gen Z is buying homes in more affordable areas like the popular Midwest, where median house prices mostly lingered below $250,000 in 2024, compared with the national median of $332,000, while pricier coastal areas lagged behind.
It’s not just where the younger generation is buying that is interesting, but how: some aspiring homeowners are getting creative, like buying properties with friends or investing in homes that they will never live in.
But as the most affordable areas get more attention, they are also, invariably, becoming more expensive — the Midwest is home to three of the five metro areas where home prices are rising the fastest, per new data analyzed by real estate brokerage Redfin. That includes a record 20% median home sale price jump in Milwaukee in the year ending this February, compared to a national average of 3.2%.
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