Countless young people are looking for affordable housing in America. While inflation has made things difficult, major cities in the Midwest and South have come through with their attractive home prices. Point2Homes did the analysis and created a city’s score (out of a hundred) based on the following:
- Home price-to-income ratio, which defines the number of average household income that would be needed to purchase an average-priced home
- Inventory count to show the number of available housing options
- Share of homes sold over the market listing
- Number of days a home is to remain on the market
- The homeownership rate of adults under 25
- Unemployment rate of Gen Z to determine financial capacity
The higher the score, the greater the chances of homeownership in the country. This list will be going through the top 10 cities that have the highest scores and then the cities that are at the bottom of the list in terms of score.
10. Scottsdale, AZ
With a score of 72.53, Scottsdale is the tenth-best city for Gen Z buyers. The home prices have inflated only by 0.38%, and the homeownership rate is a whopping 17.5%, making it an encouraging place for young homebuyers.
9. Aurora, CO
With a high score of 72.78, Aurora is one of the most welcoming cities for young people looking to buy homes. Prices have dropped by 1.09%, and about 14% of young people own homes in the city, making it an affordable market.
8. Fort Worth, TX
Fort Worth, the 8th best city for young buyers, has a score of 73.13. Its home price-to-income ratio of 7.9 makes it one of the more accessible cities in the country for Gen Z.
7. Durham, NC
Scoring 73.48, Durham is the 7th best city for young homebuyers. The home price-to-income ratio is 6.4. The city has one of the lowest youth unemployment rates, offering a ray of hope to young buyers.
6. Lincoln, NE
With a score of 75.18 and a home price-to-income ratio of 6.9, Lincoln offers promising prospects for Gen Zers. Prices have only gone up by 0.74%, and the low unemployment rate of 4.0% makes financing homes easier than in many other cities.
5. Memphis, TN
With a score of 77.00, Memphis comes in 5th. A home price-to-income ratio of 5.3 makes this place promising for young homebuyers. The home price has dropped by 2.23%, making housing more accessible.
4. Laredo, TX
Gen-Z has the fourth-best chance of becoming homeowners in Laredo. With a score of 78.70, Laredo has not experienced any inflation in home prices, and none of the homes are sold over the list price.
3. Detroit, MI
With a score of 80.53, Detroit closely follows Corpus Christi. While Detroit may have a discouraging unemployment rate and count of homes sold above the list price, it makes it up to young people by offering a 6.10% drop in home prices.
2. Corpus Christi, TX
Coming in second with a score of 80.55, Corpus Christi has a home price-to-income ratio of 4.5. This means that homes cost around five times Gen Z’s median income, which makes housing here far more affordable for young people.
1. Fort Wayne, IN
With a high score of 84.20, Fort Wayne offers Gen Z the highest chances of homeownership in the country. The home price-to-income ratio is 4.8, while the homeownership rate for Gen Z is a whopping 13.9%. The unemployment rate is low, at 4.1%.
Gen Z should watch out for cities with exorbitant home prices and high unemployment rates. Many major cities in California are not Gen Z-friendly, thanks to the high inflation, competition, and low homeownership rates. Here are ten cities where Gen Z will have trouble finding affordable housing.
1. Newark, NJ
With a low score of 27.30, Newark is the tenth-worst state for young buyers. It’s heavy on the pockets, as made evident by its home price-to-income ratio of a whopping 23.2.
2. Richmond, VA
Scoring 27.18, Richmond is one of the most challenging cities for prospective Gen-Z homebuyers. More than half the homes are sold over the listed price, inevitably breaking the bank for many young folks.
3. Chula Vista, CA
A score of 26.73 makes Chula Vista the eighth-worst city for Gen-Zers. Over half the homes are sold over the listed price. Coupled with a youth unemployment rate of 20.8%, the situation is bleak in this city.
4. Sacramento, CA
Scoring 25.73, Sacramento makes things challenging for young people. Home prices have gone up by 6.73%, and it’s no surprise that the homeownership rate for Gen Z is a low 2.8%.
5. Los Angeles, CA
Unsurprisingly, Los Angeles is one of the most expensive cities for young people. Its home price-to-income ratio of 15.7 and price increase of 5.72% render it inaccessible. Only 5.6% of Gen Z own homes in LA.
6. Riverside, CA
Riverside poses a challenge for young people as home prices increased by 9.80%. A low score of 24.00 drops its ranking significantly. Notably, 48.4% of the houses are sold over market rates.
7. San Jose, CA
Young people face a hard time in San Jose, thanks to its home price-to-income ratio of 15.7. With a score of 23.95, it’s the fourth-worst place for Gen-Z. The homeownership rate for young people is only 1.8%.
8. Lexington, KY
Don’t be fooled by Lexington’s median sale prices. They may be lower than the national average, but the high youth unemployment of 12.8% makes financing a home a difficult task. A low household income of $25,000 doesn’t help either.
9. San Diego, CA
San Diego poses a housing shortage crisis. However, even if homes were readily available for young buyers, the $1 million mark doesn’t sound too delightful. If anything, the prices have gone up by 8.43%.
10. Fremont, CA
Fermont is the worst city for young people since home prices are nearly 23 times the average young person’s household income. The competition makes things worse as homes go off the market in only ten days, going way over the listing price.
Source: Point2.
