Why Gen Z isn’t buying homes in Las Vegas
Gen Z and younger millennials took out 40 percent of the mortgages in the U.S. last year, according to a new report from Redfin. But Las Vegas is bucking the national trend with one of the lowest mortgage buy rates for people under 35.
Buyers under 35 in the Las Vegas Valley only accounted for 32.9 percent of the mortgages taken out in 2023, the fifth lowest rate among U.S. cities behind West Palm Beach, Florida (27.8 percent), which lead the country.
Bryan Cornejo, a Las Vegas real estate agent with Realty One Group who is a Gen Zer, said he has a few theories as to why his generation hasn’t broken into the housing market locally compared with other cities.
“Right now on my end in terms of my clients, it’s a lot of boomer and millennial buyers,” he said. “Gen Z, not so much, which is odd because I am Gen Z and a lot of my friends are getting to that age, they’re getting out of college, getting jobs and probably could be looking for a house, but a lot of Gen Z seem more inclined to go the rental route right now and taking a wait and see approach.”
Cornejo said high mortgage rates are playing into this, as Redfin has the 30-year-fixed rate currently at 7.4 percent, which is the highest it’s been since November 2023.
“I think it’s a little bit of everything, to be honest,” said Cornejo about the factors that have Las Vegas Gen Z homebuyers sitting on the sidelines. “The thing is people say to me, ‘Oh mortgage rates are really high right now,’ but then rental rates are just as high. But I do think in this climate it’s a lot easier for people to push it off and say, ‘Oh I am just going to rent and I’ll buy later on.’”
Education is key to helping younger people get into the housing market, Cornejo said, emphasising a long-term approach to life which he admits is a bit tougher sell in a city like Las Vegas with so many party, nightlife and entertainment options.
“I get it, people want to have fun, but it’s also important to plan for your future and home ownership is a good way to do that,” he said.
Redfin noted that one of the driving factors for Gen Z diving into the housing market right now is help from their parents, as more than a third of Gen Z and millennials who plan on buying a home soon expect a cash gift from family to help fund a down payment.
Investors are currently ramping up their purchases of Las Vegas homes, as the city is second in the nation according to a quarterly report from Redfin. Most investor purchases right now (69 percent) are all-cash transactions so they are less impacted by the high mortgage rates currently strangling the residential real estate market, Redfin said.
Rental rates in the city also appear to be on the rise, as the median rent in Las Vegas is currently $1,505 a month, which is below the national average ($1,648), however a 2.4 percent increase from last month and a 1.7 percent year over year increase.
Contact Patrick Blennerhassett at pblennerhassett@reviewjournal.com.