Gen Z, people born between roughly 1997 and 2012, are reshaping the housing market from coast to coast, according to a new study from RentCafe.
According to the study, tech-savvy, connected, and financially conscious, Gen Zers are stepping into the housing market with confidence. In just five years, the number of young renters reached 4.4 million from just 700,000, marking a sixfold surge.
RentCafe noted that while most young adults rent, the number of homebuyers in their 20s is rising at a faster pace, even though they still represent fewer than 1 million households.
In fact, RentCafe aid, just 17% of Gen Zers own a home, well behind Millennials who first transitioned to owner-majority in 2022.
RentCafe said that to understand where Gen Zers prefer to rent or buy, it analyzed 97 U.S. metro areas with at least 15,000 Gen Z households and highlighted the locations with the biggest gains.
Here are the key takeaways:
Gen Z renters increased sixfold in five years, adding 3.7 million households nationwide.
Southern metros are leading the growth with Birmingham AL, at the top after a thirteenfold increase.
Coastal cities continue to claim the highest concentrations with San Jose, CA, leading at a 95% share of Gen Z renters.
Gen Z homeownership remains limited at just 17% and is growing fastest in affordable, mid-sized markets.
Ogden, Utah, has the highest share of Gen Z homeowners with 41% of Gen Z households owning their homes.
The numbers show that one thing is clear: Young adults are drawn to places with good jobs and rising wages. But, that doesn’t always mean big cities on the coasts, but also new youth hubs in the South.
Birmingham, Alabama, Tops Renter Growh
For instance, RentCafe said that Birmingham, Alabama, wasn’t on anyone’s list of Gen Z hotspots five years ago. Now, it leads the U.S. in young renter growth with a thirteenfold increase. Following closely are two other youth-friendly metro areas in the South — Raleigh, North Carolina, and Nashville, Tennesse — with twelvefold and ninefold surges, respectively.
Major hubs such as Washington, D.C. (#7); San Jose, California (#8); Miami, Florida (#9); Boston (#10); and Philadelphia (#19) are also on the list, attracting Gen Z renters with professional growth opportunities, as well as unique lifestyle amenities, RentCafe noted.
California metro areas have the highest concentrations of Gen Z renters, led by Silicon Valley’s San Jose. There, nearly 95% of all Gen Zers rent. Not far down the list is San Francisco (#4), San Diego (#7), Los Angeles (#8) and Sacramento (#17), where soaring home prices make renting more appealing for career-driven digital natives.
RentCafe noted that young professionals in San Jose and San Francisco saw some of the fastest wage growths in the nation with salaries nearly quadrupling in just five years. Even so, it said that renting in those career accelerators remains a popular choice for many 20-somethings who value growth opportunities, convenience, and flexibility.
Gen Z Homebuyers
Although homeownership remains out of reach for many in this age group, the lower mortgage rates from 2020 to 2022 fueled the first major wave of Gen Z homebuyers. Among the fastest growing Gen Z metros, first is Tucson, Arizona, where the number of young adults who bought a home increased 170 times in just five years. Tucson is followed by Jacksonville, Florida; Dayton, Ohio; and Omaha, Nebraska.
Ogden, Utah, ranks at the top with the densest pocket of Gen Z homeowners (41%). RentCafe said that further down the list are mid-sized metro areas in the South and Midwest, where affordability, job opportunities, and strong income growth coexist harmoniously.
Today’s young renters are looking for places with good schools, job opportunities, and outdoor activities, RentCafe said. While major hubs such as New York City and Boston still attract Gen Z renters, the real growth is happening in the South.
Birmingham, Alabama, for example, now ranks as the metro with the fastest growth in Gen Z renters after a thirteenfold surge in just five years.
