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Gen Z finds home in GR market
Grand Rapids is one of the hottest markets for Gen Z homebuyers, according to a recent study, but the youngest generation still only makes up a small share of the market.
Realtor.com ranked the Grand Rapids/Wyoming metro area No. 2 nationwide for the highest percentage of home loan originations for Gen Z homebuyers.
Generation Z, the oldest of whom turned 22 in 2019, currently make up only 2% of mortgages, according to realtor.com's Fourth Quarter 2019 Generation Propensity Report, but that number will continue to grow as the generation ages and their earning potential increases.
“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's 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.”
In order to find homes within their budget, Gen Z is turning toward smaller Midwestern and Southern markets that boast higher affordability. Toledo, Ohio; Grand Rapids; and Wichita, Kansas, were the top three metros where Gen Z had the largest share of homeownership.
Top 10 Gen Z housing markets by share of loan originations
- Toledo, Ohio – 5.53%
- Grand Rapids/Wyoming – 4.43%
- Wichita, Kansas – 4.40%
- Virginia Beach/Norfolk/Newport News, Virginia/North Carolina – 4.36%
- Winston Salem, North Carolina – 3.53%
- Scranton/Wilkes Barre/Hazleton, Pennsylvania – 3.43%
- Oklahoma City, Oklahoma – 3.41%
- Cincinnati, Ohio – 3.39%
- Youngstown/Warren/Boardman, Ohio/Pennsylvania – 3.32%
- Baton Rouge, Louisiana – 3.14%
According to the realtor.com study, Gen Z and millennials have differing preferences on where to buy a home. Of the markets on Gen Z's top 10 list, only Grand Rapids and Baton Rouge, Louisiana, appeared on the same top 10 list for millennials.
Larger and trendier markets such as San Francisco, Boston and Denver, were the most different between the generations. All three markets made it to the top 20 for millennials but ranked between Nos. 81 and 98 for Generation Z, most likely due to high housing prices shutting out Gen Z buyers.
The Report on Loan Originations by Age and Generational Groups is based off of a realtor.com analysis of a sample of residential mortgage loan originations from Optimal Blue. The top market rankings were calculated using a group’s mortgage origination share.
Generation Z is defined as those born between 1997 and 2012. Millennials are defined as those born between 1981 and 1996.