Core Insights - Millennials represent approximately 49.7% of mortgage inquiries in the 50 largest U.S. metros for 2024, a decrease from 52.3% in 2023, attributed to worsening affordability and increased participation from Gen Z [6] - In high-cost tech markets, millennials dominate mortgage applications, with San Jose at 62.6%, Seattle at 57.1%, and San Francisco at 56.9%, indicating their financial capability despite high prices [6] - The reliance on adjustable-rate mortgages (ARMs) and refinancing among younger buyers raises concerns about potential financial risks if interest rates do not decrease significantly [2][6] Market Dynamics - The average down payment for millennials in San Jose is about $213,000, while in San Francisco it is around $190,000, with typical loan requests near $794,000 and $736,000 respectively, reflecting the high cost of living in these areas [6] - The current market is characterized by a "lock-in" effect among baby boomers, who are not selling their homes due to low mortgage rates, leading to limited inventory and sustained competition in millennial-preferred markets [6] Future Outlook - Millennial demand is expected to remain a key driver of home purchases, particularly in high-wage areas, although affordability challenges will lead to uneven market activity [6] - The dependence on ARMs and refinancing strategies among younger buyers introduces risks related to potential payment shocks if interest rates remain stable and home prices do not adjust [6] - Without a significant increase in new home construction, the existing home turnover will remain limited, perpetuating inventory constraints and competitive pressures in the housing market [6]