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MortgagePoint » Your Trusted Source for Mortgage Banking and Servicing News 70 June 2024 J O U R N A L GEN ZERS AND MILLENNIALS AGE INTO HOMEOWNERSHIP T wo-fifths (39.7%) of new mortgages issued in 2023 went to homebuyers under 35, with 26.5% going to buyers aged 35 to 44. The 45-54 age group took out 16.1% of new mortgages, followed by the 55-64 age group (10.8%) and the 65-74 age group (5.4%). This is according to new research from Redfin. Over the previous five years, the age mix of homebuyers has remained constant, with younger Americans accounting for most mortgage borrowers. As people get older, they are less likely to take out a mortgage. Per the report, there are multiple reasons why people under 45 are taking out most mortgages, including: » Gen Zers and millennials are aging into homeownership; the median age of first-time U.S. homebuyers is 35. People tend to be in their late 20s or 30s when they buy their first home because that's when homeownership becomes financially feasible and desirable: They've had time to save for down payments and qualify for mortgages, and they may be growing their families. » Many people view real estate as a safer long-term place to park their money than the stock market or other tradi- tional investments. » Younger buyers are likely to take out loans rather than pay for homes in cash because they haven't had much time to amass wealth and/or build equity from the sale of a previous home. Older buy- ers are more likely to pay in cash. "First-time buyers aren't as spooked by high rates as people who are trying to move up to a bigger or better home," said Antonia Ketabchi, a Redfin Premier agent in Maryland. "High costs are still a challenge, but younger people are excited about the fact that they're looking to buy their first home, and they're not locked in by a low mortgage rate because Market Trends until now they've been renting. Plus, they weren't in the market three years ago when mortgage rates were sitting under 3%, so they don't have an ultra-low point of comparison." Although Gen Zers and millennials were the most likely to purchase a home last year, they still have lower overall homeownership rates than older Ameri- cans, which is understandable given that they have had less time to do so. In 2023, just more than a quarter (26%) of adult Gen Zers owned their homes, whereas 55% of millennials did. In contrast, 72% of Gen Xers and 79% of baby boomers own their homes. However, Gen Zers are catch- ing up to older generations: 19–25-year- olds own more homes than millennials and Gen Xers did at the same age. Some Gen Zers, Millennials Get Financial Help from Family Some young homeowners received financial assistance from their parents or other elderly family members to fund their acquisitions. In 2023, 3.3% of homeowners under the age of 35 had a co-borrower over the age of 55 on their mortgage loan, compared to 2.8% for buyers aged 35 to 44. When cash presents are considered, the percentage of young purchasers who receive financial assistance from their parents increases significantly. According to a Redfin-commissioned poll conduct- ed in February 2024, more than one-third of Gen Zers and millennials planning to buy a home expect to receive a monetary gift from relatives to help fund their down payment. Buyers Under 35 Take Out Nearly Half of all Mortgages in Some Rust Belt Metros In 2023, Gen Z and young millennial homeowners accounted for the ma- jority of mortgage activity in relatively affordable Rust Belt metros. Pittsburgh provided 48% of new mortgages to buyers under the age of 35, the highest percentage among the 50 most populous U.S. metros. It is followed by Cincinnati (46.5%), Philadelphia (46.3%), Detroit (46.1%), and Warren, Michigan (46%). Buyers under 35 accounted for the