North America’s youngest market participants are now dipping their toes into housing, with TransUnion’s Q2 Industry Insights Report showing that mortgages among Gen Z consumers (those born in 1995 onwards) have grown by a massive 112% year-over-year.
“The rapid growth in Gen Z credit activity is occurring despite many of these individuals having grown up during the Great Recession. Though the recession itself lasted less than two years, its impact was felt for several years afterward,” TransUnion vice president of research and consulting Matt Komos stated.
“As we see more members of this group come of age, we naturally expect continued growth in credit activity by Gen Z, which we will monitor closely to compare to the behaviors of previous generations.”
However, the report hastened to add that despite the remarkable growth, only 0.5% of the overall mortgage volume in the United States is held by Gen Z consumers.
“The housing market can have high barriers to entry for first-time home buyers, as low inventory and rising home prices continue to make affordability an issue. However, with interest rates dropping in Q2, we expect originations to grow through the end of the year, largely driven by refinance volume,” according to Joe Mellman, TransUnion senior vice president and mortgage business leader.
The sector’s most preferred product is the credit card. As of the second quarter, approximately 55% of Gen Z consumers carried balances, although they still only comprise 5% of America’s carrying card debt.
Overall, as much as 44% of the demographic in the U.S. was carrying balances across all product types during Q2 2019. This represented roughly 14 million Gen Z members.