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May 2023 » thefivestar.com 77 J O U R N A L May 2023 May 2023 » thefivestar.com 77 J O U R N A L May 2023 gration patterns, and relative affordability due to new home construction." "But while housing market challenges remain, particularly in light of mortgage rate volatility and the ongoing banking turmoil," Hepp continued, "pent-up homebuyer de- mand is responding favorably to lower rates in many markets. This trend holds true even in the West, leading to a solid monthly gain in home prices in February. U.S. home prices rose by 0.8% in February, double the month- over-month increase historically seen and indicating that prices in most markets have already bottomed out." The top takeaways from the data include: » U.S. home prices (including distressed sales) increased by 4.4% year over year in February 2023 compared to February 2022. On a month-over-month basis, home prices increased by 0.8% compared with January 2023. » In February, the annual appreciation of attached properties (5.4%) was 1.4 percentage points higher than that of detached properties (4%). » \CoreLogic forecasts show annual U.S. home price gains slowing to 3.7% by February 2024. » Miami posted the highest year-over-year home price increase of the country's 20 tracked metro areas in February, at 15.6%, while Tampa, Florida continued to rank second at 9.3%. » Florida and Maine recorded the highest annual home price gains: 11.3% and 10.3%, respectively. South Carolina posted the third-highest growth, with a 9.2% year- over-year increase. Eight states and dis- tricts recorded annual losses: Washington (-4.9%); Montana (-3.1%); Nevada (-1.7%); Idaho (-1.6%); Utah (-1.6%); California (-1.5%); Washington, D.C. (-1.2%); and Ore- gon (-0.7%). MILLENNIALS BOUGHT MORE HOMES THAN OTHER COHORTS LAST YEAR A ccording to Redfin data, 30% of 25-year-olds owned a home in 2022, a tad bit higher than previous gen- erations did at 25-year-old as 28% of millenni- als owned their own home, compared to 27% of Generation X but higher than Boomers at 32%. The most recent adult generation, Generation Z, was able to take advantage of record-low mortgage rates in 2020 and 2021 to buy homes, even in light of low inventory and rising prices, putting their generation on a slightly better homeownership path than their parents. Gen Zers tracking along with their par- ents' homeownership rate is counter to the common narrative that it's more difficult for today's 20-somethings to buy homes than in generations past. Gen Z homeowners spent the same portion of their income on housing in 2021 (the most recent year for which income data is available) as they did three decades earlier. For example, a 25-year-old's median mort- gage payment was about $1,013 in 2021, or 16% of their $74,900 which pales in comparison to the $904 mortgage payment in 1990, or 16% of their $69,419 of income. Many Gen Zers took advantage of the sub-3% mortgage rates to become homeown- ers during the throws of the pandemic who have also enefited from wage growth and a strong job market. "The rising tide lifted Gen Z homebuy- ers in 2020 and 2021; they were part of the pandemic-driven homebuying frenzy," said Redfin Chief Economist Daryl Fairweather. "Record-low mortgage rates, remote work providing freedom to move somewhere more affordable, and skyrocketing rental costs motivated some Gen Zers to break into the housing market. While the oldest of their generation had just graduated college when the pandemic started and hadn't started building up their bank accounts, they had some financial advantages. The unemploy- ment rate was near record lows in late 2021 and 2022, with pandemic-related labor short- ages in industries that attract young workers like hospitality and retail prompting those employers to boost pay. Government stim- ulus payments, the pause on student loan repayments, and the fact that many young adults lived with family during the lock- downs also helped Gen Zers save money." Younger homebuyers need less money than their older counterparts because they tend to buy cheaper homes with smaller down payments. That's partly because people under 25 years old may be more flexible about home size and location than an older person who's more likely to have children and places more value on proximity to cer- tain schools and their offices. In 2022, the typical primary residence purchased by someone under 25 years old costs $235,000 and came with a $10,000 down