For real estate developers and investors, understanding where the next wave of homebuyers is putting down roots is key to identifying emerging opportunities. While Gen Z has been largely priced out of coastal markets due to high home prices and rising debt burdens, they’re making moves in more affordable parts of the country—especially in the Midwest and South.

A recent report from CoreLogic highlights 10 metros where Gen Z homebuyers (born between 1997 and 2012) are actively purchasing homes. These cities offer lower entry prices, making homeownership feasible for younger buyers who are often saddled with student loans and credit card debt.

Where Gen Z Is Buying Homes

Gen Z accounted for 13% of all home purchase applications in 2024, up from 10% the previous year. The highest concentrations of Gen Z buyers were found in seven Midwestern metros and three Southern cities.

Top 10 Markets for Gen Z Homebuyers in 2024:

1. Des Moines, IA – 21% of Gen Z home purchase applicants | Median home price: $267,594

2. Omaha, NE – 21% | $274,400

3. Youngstown, OH – 20% | $136,040

4. Dayton, OH – 20% | $183,788

5. Grand Rapids, MI – 20% | $205,764

6. Little Rock, AR – 19% | $196,659

7. Birmingham, AL – 19% | $185,087

8. Cincinnati, OH – 19% | $255,162

9. Jackson, MS – 19% | $274,629

10. Wichita, KS – 19% | $224,460

Why These Markets? Affordability and Inventory

According to CoreLogic’s Principal Economist Archana Pradhan, affordability is the driving factor behind Gen Z’s preference for these areas. The Midwest and South offer significantly lower median home prices compared to national averages, making it easier for young buyers to enter the market.

For example, Des Moines—tied for the No. 1 spot—had a median home price of $267,594 in 2024, which is 24% lower than the national median of $332,000. Similarly, Youngstown, OH, offers entry-level homes at just $136,040, making it one of the most accessible housing markets in the country.

Beyond pricing, supply is another major factor. Realtor.com’s senior economic research analyst, Hannah Jones, points out that well-supplied markets with ample for-sale inventory provide more opportunities for first-time buyers, particularly in the South.

Where Gen Z Isn’t Buying

High-priced coastal markets continue to be out of reach for most Gen Z buyers. San Jose and San Francisco had the lowest share of Gen Z homebuyers, with just 4% of purchase applications. Other expensive metros, such as Los Angeles, Honolulu, and Bridgeport, CT, saw only 6% of Gen Z applicants.

Other Markets Welcoming First-Time Buyers

For young buyers looking beyond the Midwest, there are still affordable options in the Northeast and South. Realtor.com identified several first-time buyer-friendly cities based on price, cost of living, and commuting ease.

Top alternative markets include:

• Harrisburg, PA – Affordable home prices and a low cost of living

• Rochester, NY – The lowest median home price on the list at $129,900

• Villas, FL – One of three Florida markets with rising first-time buyer activity

Challenges Gen Z Buyers Face

Despite increasing homeownership rates, Gen Z buyers still face significant financial hurdles. According to Newsweek, the average Gen Zer carries $94,000 in personal debt—more than any other generation. Credit card debt is particularly high, with 56% of Gen Z carrying a balance and having the highest delinquency rate of all age groups, per a 2024 study by the New York Fed.

These financial burdens make it tougher for young buyers to secure mortgages. However, those who focus on improving credit scores, reducing debt, and increasing income will be best positioned to take advantage of affordable housing markets.

Opportunities for Developers and Investors

For real estate investors and developers, these Gen Z hotspots present strong opportunities. The demand for entry-level housing is rising, and markets with affordable inventory are seeing increased first-time homebuyer activity.

Developers should focus on building cost-effective homes in these emerging markets, while investors should consider rental properties in areas where young buyers are looking to transition from renting to ownership.

Gen Z is entering the market in greater numbers, but they’re doing it on their terms—seeking affordability, supply, and livability over prestige. Smart investors will take note and position themselves accordingly.