The youngest group of adults in the country, Generation Z, is choosing Salt Lake City, Utah, over other cities as a location to put down roots.
That’s according to new research from LendingTree, the marketplace that connects mortgage applicants with lenders.
The Crossroads of the West narrowly beat Oklahoma City, where deposits are just $18,752, to take first place. Birmingham, Alabama completed the top three.
At the other end of the spectrum, crime- and drug-ridden San Francisco is by far the least popular choice.
City by the Bay follows New York City in the race to the bottom with average deposits for 18-25 year olds at $66,561 and $46,476, respectively.
Salt Lake City, Utah is the most popular location for Generation Z homeowners
Lending Tree analyzed data from the country’s 50 largest metropolitan areas through 2022 to determine its results. Generation Z typically includes those born between 1997 and 2012.
This generation accounts for nearly 15 percent of all homebuyers in the United States.
The Lending Tree study attributes Salt Lake City’s presence at the top of the list to a strong job market and a “good mix of urban and rural amenities.” The presence of Birmingham and Oklahoma City is due to cheap mortgage rates.
Crime is not cited as the reason San Francisco, New York and San Jose are at the bottom of the list, but exorbitant real estate prices are.
A total of six of the ten least popular cities are in California. “Expensive real estate” is again given as the reason.
The largest differences in average down payment costs are between Oklahoma City, where it is $18,752, and San Jose, where it is $77,786.
Coming in at number 16 on the list, it’s Buffalo, New York where Generation Zers can be found with the highest average credit score of 707.
A little below Buffalo is New Orleans at 23, which has the lowest average credit score of 651.
The lowest average Gen Zers borrow is in Cleveland, number 17 on the list, where people typically borrow $193,600. The highest average loan amount is $541,436 and is disbursed in San Jose.
According to the Lending Tree study, New York City is the second most popular place to buy for young homeowners
Members of the San Francisco homeless community. The City by the Bay is the least popular city for Gen Z looking to buy a home
The author of the Lending Tree study in Utah’s Zion National Park cited the mix of urban and rural activities in the Beehive State as one reason for its popularity
Lending Tree credits the study with “helping to dispel the myth that homeownership is impossible for all young Americans.”
However, the conclusion states that housing and renting remain the most popular options for Gen Z due to stagnant salaries and a lack of experience in the housing market.
“A lot of cities in California and places like New York and Washington, DC are really expensive parts of the country, and while there are a lot of 23-year-olds who would love to buy a house in San Francisco or Brooklyn, the truth is that.” Thing is, it’s really expensive,” study author Jacob Channel told CBS News.
“Younger people are in a situation where mortgage rates are high, house prices are high and they haven’t been in the workforce that long so they don’t have that much savings,” Channel added.
Channel said that probably many of the 15 percent of homebuyers who are members of Generation Z come from a more affluent demographic.
He also praised Salt Lake City, saying that when you get tired of the city, you can easily go to the country for hiking or kayaking.
“There’s wilderness nearby, but fewer people.” [in NYC] “They have cars and it’s harder to get there than if you lived in Salt Lake,” Channel said.
The average US long-term mortgage rate rose this month to its highest level since November, pushing up borrowing costs for potential homebuyers at a time when the housing market is being held back by a near-record low inventory of homes on the market .
Mortgage buyer Freddie Mac said Thursday that the average interest rate on the benchmark 30-year home loan rose to 6.79 percent from 6.57 percent last week. A year ago, the average rate was 5.09 percent.
The latest hike is the third in three weeks and takes the average interest rate on a 30-year home loan to its highest level since rising above 7 percent in November.
High interest rates can cost homebuyers hundreds of dollars a month and limit how much they can afford in a market that remains unaffordable for many Americans after years of skyrocketing home prices and historically low housing stocks.