Market Research

Gen Zers and Young Millennials Took Out 40% of U.S. Mortgages in 2023

Two in five (39.7%) new mortgages issued in 2023 went to homebuyers under 35, while 26.5% went to buyers aged 35-44. Next, 45-54 year olds took out 16.1% of new mortgages, 55-64 year olds (10.8%) and 65-74 year olds (5.4%). All of this is according to a Redfin analysis of Home Mortgage Disclosure Act (HMDA) data covering purchases of primary home, which does not cover purchases of investment properties or second homes.

Over the last five years, the breakdown of homebuyers by age has remained stable, with younger Americans as the most common mortgage borrowers as the likelihood of taking out a mortgage declines as people get older.

Accoriding got Redfin, there are several reasons why people under 45 are taking out most mortgages:

  • 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 traditional 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 buyers are more likely to pay in cash. 

Additionally, Redfin agents say younger buyers tend to be less fazed than older generations by mortgage rates, which reached a two-decade high of 7.8% last year and in recent months settled back near 7%. 

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