Gen Z renters are increasingly making their presence felt in some U.S. communities, especially in the South. One example is Birmingham, AL, where Gen Zers were 13 times more likely to rent in 2023 than in 2018, making the metro the leader in young renter growth.
Some Gen Zers are also buying homes, often in smaller and mid-sized metro areas in the South and Midwest, like Ogden, UT, which led the nation with a 41% share of Gen Z homeowners– a cohort that grew from 340 homes in 2018 to 6,754 in 2023, 19 times more than it started with. Even in Birmingham, where most young adults still rent, nearly one-third already own homes — one of the highest rates in the nation.
A new analysis by RentCafe studied trends in Gen Z's housing patterns in 97 major metros. It found that the number of renter households in this age group, born between 1997 and 2012, soared from 700,000 to 4.4 million in just five years — a sixfold increase. Still, only 17% of Gen Zers own a home, well behind Millennials, who became the majority of owners in 2022.
"One thing is clear: Young adults are drawn to places with good jobs and rising wages. However, this doesn't always mean big cities on the coasts, but also new youth hubs in the South," RentCafe said. In the process, they are redefining the places they settle in.
Ranked by their rate of growth in the five years, the top 10 cities for Gen Z renters are Birmingham, Raleigh, Buffalo, Nashville, Denver, Jackson, Washington, D.C., San Jose, Miami and Boston. A second Alabama city, Huntsville, ranked 11th. In each case, the Gen Z renter population grew by a factor of eight or nine over the period.
What appeals to them in these locations is the often-lower cost of living, diverse entertainment and leisure options and business opportunities. In Birmingham and Huntsville, devotion to the University of Alabama's Crimson Tide is likely another draw. In some cases, the specific character of the region is the attraction, such as government, policy consulting, technology and the nonprofit sector in Washington, D.C. or the tech hubs in California and Boston.
The highest concentration of 20-something renters — 95% — is to be found in San Jose, Silicon Valley's largest city. High renter ratios are found in San Francisco, San Diego and Los Angeles, in addition. Paychecks that have almost tripled in five years still will not cover the expense of buying a house. Similarly, eight out of 10 Gen Zers in New York, Minneapolis, and Philadelphia are renters, whereas in Texas, they are mainly clustered in College Station, Austin, Lubbock and Dallas.
Among Gen Z homeowners, Tucson leads the way, having grown 170 times from 35 in 2018 to 5,991 in 2023. Other trending areas for homeownership include Jacksonville, Dayton, Omaha, Lafayette, Louisville, Lincoln, San Antonio, Buffalo and Des Moines. Affordable homes and strong income growth helped drive the trend.
"The typical income for a digital native doubled or tripled in five years in each of these place," the report noted.
"Tech-savvy, connected, and financially conscious, Gen Z is stepping into the housing market with confidence — and reshaping it in the process."
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