Gen-Z consumers have started to buy homes, according to the findings of TransUnion’s Q2 2019 Industry Insights Report.
Data from the report revealed that mortgages for Gen-Zers had the biggest annual growth rate compared to other kinds of loans such as auto loans, credit cards, and personal loans.
The share of Gen-Z (born in 1995 or after) borrowers who took out a mortgage in Q2 2019 has soared 112% to 319,000 year over year. In 2018, 150,000 Gen Z borrowers had taken out a mortgage in the second quarter.
Overall, nearly 14 million, or 44%, of the Gen-Z cohort were carrying a credit balance, up 3 million from the year before.
Credit card debt was the most popular form of loan for Gen-Z consumers in Q2 2019, with more than 7.7 million borrowers carrying a credit card balance, up from about 5.5 million in Q2 2018. Auto loans among Gen-Z borrowers rose 42% to about 4.4 million, while personal loans climbed 45% to 746,000 over last year.
Although mortgages had the highest year-over-year increase among Gen-Z borrowers, they comprise only 0.5% of the overall debt Gen-Z consumers carry, as most of Gen-Zers are still a few years short of reaching the traditional homebuying age.
The number of Gen-Z consumers who were credit eligible was 31.5 million in Q2 2019, up 4.5 million from Q2 2018. TransUnion projected a surge of 13 million more Gen-Z mortgage borrowers over the next three years.
“Both the newest and oldest members of the credit-eligible Gen-Z generation are beginning to enter the credit market for the very first time,” said Matt Komos, vice president of research and consulting at TransUnion. “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.”