Editor's Note: This story originally appeared on Construction Coverage.
Elevated home prices and high interest rates have made it especially difficult for young, first-time homebuyers to make a purchase.
Some unique, pandemic-related economic factors have contributed to the current state of the market, but some of the largest structural factors driving the current market are generational.
Baby boomers and members of the Silent Generation — those born in 1946–1964 and 1925–1945, respectively — are increasingly choosing to age in place as they reach retirement. Simultaneously, the millennial generation, who were born between 1981 and 1996, are now America’s largest generational cohort and at a peak age for buying a first or second home.
Together, these forces mean that more buyers are competing for fewer homes. Zillow recently estimated that the U.S. needs 4.5 million more homes to meet current demand.
Despite these challenging conditions, young buyers have made progress in homeownership in recent years. For young adults in Generation Z interested in homeownership, some geographic locations prove more favorable than others.
The following are the top cities with the most homebuyers under age 25. The analysis was conducted by researchers at Construction Coverage using data from the Federal Financial Institutions Examination Council. For more information, refer to the methodology section.
15. Kansas City, MO-KS
- Under-25 share of home purchase loans: 5.9%
- Total under-25 home purchase loans: 1,152
- Median loan amount: $195,000
- Median loan-to-value ratio: 93.7%
- Median interest rate: 6.625%
14. Oklahoma City, OK
- Under-25 share of home purchase loans: 6.1%
- Total under-25 home purchase loans: 690
- Median loan amount: $165,000
- Median loan-to-value ratio: 92.6%
- Median interest rate: 6.750%
13. Buffalo-Cheektowaga, NY
- Under-25 share of home purchase loans: 6.2%
- Total under-25 home purchase loans: 465
- Median loan amount: $175,000
- Median loan-to-value ratio: 91.3%
- Median interest rate: 6.625%
12. Tulsa, OK
- Under-25 share of home purchase loans: 6.3%
- Total under-25 home purchase loans: 468
- Median loan amount: $170,000
- Median loan-to-value ratio: 93.5%
- Median interest rate: 6.750%
11. Pittsburgh, PA
- Under-25 share of home purchase loans: 6.4%
- Total under-25 home purchase loans: 1,079
- Median loan amount: $155,000
- Median loan-to-value ratio: 92.7%
- Median interest rate: 6.624%
10. Cleveland, OH
- Under-25 share of home purchase loans: 6.4%
- Total under-25 home purchase loans: 1,094
- Median loan amount: $165,000
- Median loan-to-value ratio: 91.3%
- Median interest rate: 6.750%
9. Indianapolis-Carmel-Greenwood, IN
- Under-25 share of home purchase loans: 6.6%
- Total under-25 home purchase loans: 1,383
- Median loan amount: $205,000
- Median loan-to-value ratio: 93.4%
- Median interest rate: 6.875%
8. Minneapolis-St. Paul-Bloomington, MN-WI
- Under-25 share of home purchase loans: 6.6%
- Total under-25 home purchase loans: 2,298
- Median loan amount: $255,000
- Median loan-to-value ratio: 92.4%
- Median interest rate: 6.625%
7. St. Louis, MO-IL
- Under-25 share of home purchase loans: 6.7%
- Total under-25 home purchase loans: 1,643
- Median loan amount: $175,000
- Median loan-to-value ratio: 92.2%
- Median interest rate: 6.750%
6. Salt Lake City-Murray, UT
- Under-25 share of home purchase loans: 7.0%
- Total under-25 home purchase loans: 652
- Median loan amount: $345,000
- Median loan-to-value ratio: 88.4%
- Median interest rate: 6.873%
5. Detroit-Warren-Dearborn, MI
- Under-25 share of home purchase loans: 7.0%
- Total under-25 home purchase loans: 2,464
- Median loan amount: $175,000
- Median loan-to-value ratio: 93.1%
- Median interest rate: 6.875%
4. Birmingham, AL
- Under-25 share of home purchase loans: 7.7%
- Total under-25 home purchase loans: 684
- Median loan amount: $165,000
- Median loan-to-value ratio: 92.5%
- Median interest rate: 6.875%
3. Louisville/Jefferson County, KY-IN
- Under-25 share of home purchase loans: 7.7%
- Total under-25 home purchase loans: 887
- Median loan amount: $185,000
- Median loan-to-value ratio: 92.0%
- Median interest rate: 6.625%
2. Cincinnati, OH-KY-IN
- Under-25 share of home purchase loans: 7.7%
- Total under-25 home purchase loans: 1,480
- Median loan amount: $185,000
- Median loan-to-value ratio: 92.5%
- Median interest rate: 6.750%
1. Grand Rapids-Wyoming-Kentwood, MI
- Under-25 share of home purchase loans: 9.1%
- Total under-25 home purchase loans: 961
- Median loan amount: $205,000
- Median loan-to-value ratio: 93.1%
- Median interest rate: 6.875%
Methodology
The data used in this analysis is from the Federal Financial Institutions Examination Council’s 2023 Home Mortgage Disclosure Act dataset. Only conventional home purchase loans originated in 2023 were considered.
To determine the locations with the most homebuyers under 25, researchers calculated the share of home purchase loans taken out by applicants under 25 years old.
In the event of a tie, the location with the greater total number of home purchase loans accounted for by applicants under 25 years old was ranked higher.
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