REAL ESTATE NEWS

Fresno is the top hotspot for Generation Z to settle down and buy a home, thanks to the favorable economic conditions the area hosts, according to a report from Yardi's RentCafe.

The city not only hosts the highest share of Zoomer homeowners in California (24%), but also the second-highest growth statewide, with buying in the area increasing by a whopping 1,179% from 2018 to 2023, according to the report.

In Fresno, one in four Gen Zers is a homeowner. Bakersfield — the second-largest hub in the Central Valley — isn't far behind, with 20.7% of the age group owning a home there.

With national Gen Z homeownership at approximately 26.1%, Fresno gains its attraction thanks to several local economic conditions that make early homeownership more attainable than in other California metros.

Gen Zers in the city earn more by age 30 than older generations did. According to a Fresno-specific housing cost study, Fresno Gen Zers are projected to make $432,861 by age 30, $16,000 more than Millennials raked in by that age.

This sharply contrasts with younger workers in coastal metros, where wages have not kept pace with the explosion in home prices, according to RentCafe.

Renting and owning are both expensive in California, but Fresno's cost gap between renting and owning is narrower for Gen Z than it was for Millennials.

A 2024 RentCafe report estimates that Gen Z in Fresno would spend $131,600 on rent by age 30 and $190,418 on homeownership costs (excluding the down payment). That $58,818 difference is notably lower than the rent-vs-own cost differences Millennials faced.

Fresno's housing costs are high—but far lower than coastal cities like San Jose, Los Angeles and San Diego, where Gen Z ownership is nearly impossible. The study notes that California's most expensive metros (like San Jose) can cost the age group up to $300,000 in rent and $466,000 in ownership costs before age 30.

Both Millennials and Gen Z in Fresno spend about 26.5% of their income on rent between ages 22 and 29, below the 30% cost-burden threshold. The younger cohort spends 30.2% of its income on ownership, compared with Millennials' 36.1%.

This lower debt-to-income pressure improves mortgage qualification chances, savings ability and financial stability, giving Fresno Gen Zers a smoother path to early ownership than peers in tougher markets.

Source: GlobeSt/ALM