Indianapolis is a hot market for Gen Z homebuyers
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Indianapolis' relative housing affordability is making it one of the most accessible markets in the nation for young people.
Driving the news: Generation Z — considered those born between 1997 and 2012 — made up more than 20% of mortgage requests last year in Indianapolis, per a June report from LendingTree.
- Only a few other markets — including Salt Lake City, Oklahoma City, Birmingham, Cincinnati and Louisville — saw the same level of homebuying interest from young people.
Why it matters: Even as housing costs rise toward historically unaffordable levels in Indianapolis, Central Indiana homes for sale remain cheaper than in most big cities.
Between the lines: There's a connection between home prices and the ages of buyers.
- In historically less affordable cities — including San Francisco, New York and Los Angeles — Gen Z made up less than 10% of mortgage requests.
- Overall, Gen Z made up only 4% of U.S. homebuyers in 2022, according to a trends report by the National Association of Realtors.
Meanwhile: The share of first-time buyers in the U.S. has shrunk to a record low as inventory and affordability issues persist, per the association, Axios' Sami Sparber and Brianna Crane write.
- First-timers are also waiting longer to buy; the median first-time buyer age jumped from 33 to 36 from 2021 to 2022, the latest data shows.
- The majority of Americans believe it's the worst time ever to buy a house.
The intrigue: Some Gen Zers may have fared better than millennials when they were the same age, according to 2023 Redfin data.
- In 2022, 30% of 25-year-olds owned their homes, compared with 28% when millennials were 25.
The big picture: High home prices and rents, steep interest rates and slow construction have affected affordability, per a report by Harvard University's Joint Center for Housing Studies.
The bottom line: Indianapolis is not immune to those economic trends, but it started from a more affordable baseline and still has a lower barrier to entry for first-time homebuyers than most other cities.