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50 | M R EP O RT O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST ORIGINATION Look Who's Buying: Gen Z Enters the Housing Market Youngest consumers made up 1.4% of loan originations in December 2019. W hile still mak- ing up a small minority of the overall housing market, Gen Z is showing up in certain regions and sectors of the market. While they still have a long way to go to catch up to millennials in terms of market share and purchasing power, their median purchase price is growing at a faster pace than their slightly older coun- terparts, according to data from realtor.com. Gen Z—those born between 1997 and 2012—made up 2% of primary home loan originations in December, according to realtor. com. While this is significantly smaller than millennials, which claimed 48% of the market, Gen Z has "already caught up to the Silent Generation in home pur- chasing activity and will continue to ramp up purchasing as they too grow older and more estab- lished," according to realtor.com. Gen Z accounted for 1.4% of primary home loan originations by total volume in December, up sig- nificantly from 0.8% a year earlier. Meanwhile, the millennial share increased from 44% to 47%. Gen X and baby boomers both decreased market share over the year, by 2 percentage points and 1 percent- age point, respectively. So far, Gen Z favors lower- priced homes in the Midwest and the South. Five of the top 10 markets with the highest share of Gen Z home- buyers in December are located in the Midwest and four are in the South. Toledo, Ohio, ranked No. 1 for Gen Z homebuyers, with these young homebuyers making up 5.4% of home loan originations, compared to 2% across the nation. Following Toledo, the top five Gen Z markets were Grand Rapids, Wyoming-Michigan (4.43%); Wichita, Kansas (4.40%); Virginia Beach-Norfolk-Newport News; Virginia-North Carolina (4.36%); and Winston Salem, North Carolina (3.53%). There are a couple possible explanations for why Gen Z homebuyers are more prevalent in the Midwest and the South. One possible reason is that peo- ple in these regions tend to marry at a younger age, perhaps propel- ling them to purchase a home. One of the continued refrains for why young millennials were not entering the housing market in years past was that millennials were delaying marriage and hav- ing children later. The average age people get married in the United States (for a first marriage) is 29.8 for men and 28 for women, according to data from the Census Bureau. These ages have been on the rise for years. However, in Kansas, home to the most popular market for Gen Z homebuyers, the average marriage ages are 27.7 for men and 25.8 for women, according to an analysis of marriage age by state by The Insider. Another contributing factor is that home prices are lower in the Midwest and South than in the Northeast and the West. Younger homebuyers still building their wealth may be more easily able to afford a home in these regions. The median price of a home purchased by a Gen Z buyer in December 2019 was $160,000. This is significantly lower than the median price of a home purchased by a millennial, $256,500. However, the median purchase price for millennials rose 7% over the year, while the median purchase price among Gen Z rose 11%. The median list price for homes in the top 10 markets for Gen Z homebuyers in December was $224,500. This is 25% less than the national median list price at $300,000. Looking further, Realtor.com determined the median list price for homes actually purchased by Gen Z buyers was $130,000, which is 42% lower than the national median list price. In addition to purchasing lower priced homes, Gen Z buyers tend to put less money down on their home purchase. Down payments averaged 5% for Gen Z buyers, compared to 8.5% for millennial buyers in December. Down pay- ments increased with age. Gen X buyers put 11.5% down, and baby boomers put an average of 17.6% down on their homes in December. With their lower down pay- ments and lower-priced homes, Gen Z buyers are taking on debt faster than older generations but not as voraciously as millennials. Gen Z buyers took on a median $154,000 in home loan debt in December, which is a 7.0% increase from a year earlier. Millennials took on a median $242,100 in December, which is 8.4% higher than a year earlier. The future for Gen Z home- buyers is a little uncertain as inventory is tight in the lower end of the housing market. "Given that lower-cost entry-level homes are in short supply across the country, Generation Z will face some tough competition from mil- lennials and other home shoppers in their search to find an affordable home," realtor.com noted.