Surveying more than 4,900 buyers, Zillow Group Population Science found that the median age of U.S. home buyers is 44, while the average is slightly higher at 46. With about half of buyers being born before 1980, millennials (from 1981 to 1996) report that 39% have been denied mortgage financing at least once, according to the Zillow Consumer Housing Trends Report 2022.
Still higher than pre-pandemic, reports of mortgage denials fell to 28% from 34% in 2021. For those younger than 30, 27% of buyers reported at least one mortgage denial; only 9% of buyers in their 50s did. Generationally, 25% of Gen X and 32% of Gen Z mortgage buyers were denied at least once.
The data also shines a light on buyers of color as two in five (41%) reported being denied at least once, higher than nearly a fifth of white buyers at 22%.
In line with young buyers, 45% have been first-timers this year. This percentage is the same as that of 2019 prior to the pandemic. Possibly due to the cooling market and rising rates, seasoned buyers may have decided to stay put with their more favorable rates. One in five (22%) buyers paid for their homes without a mortgage, which is down from 32% in 2021.
For 2022 so far, over half (58%) of mortgage buyers put down less than 20% at a median of 10% to 19% of the final purchase price. Regardless of the percentage, most mortgage buyers say they used savings to finance their down payments. The largest source for buyers to make a down payment was through saving up over time (63%) and previous home sale profits (46%).
It’s no surprise that the percentage reported for previous homes sales as a down payment source fell from the high of 59% last year as the selling market was hot. Other sources of down payments involved gifts from family or friends, loans from family or friends, retirement funds, and sold stocks or investments.
