They say timing is everything but in Gen Z’s world, the clock on homeownership ticks a little slower. In fact, an astounding 82% believe it’s harder to purchase a home these days than it was in previous generations, and they’re adjusting life targets to fit that reality. Instead of leaping into mortgages, they’re all in on professional advancement, financial stability, and flexibility, with the goal of homeownership very much on the radar but on a longer timetable.
1. The New Age of First-Time Buyers
First-time homebuyers’ average age has increased to 38, a full decade more than in the 1980s. This trend means younger adults are missing out on years of potential housing wealth. The share of first-time buyers also marked all-time-low 24%, down from a 1981-to-date average of 40%. Low inventory, high mortgage rates that stay in the 7% zone, and median home prices over $422,000 make entering the market a challenging proposition.
2. Career First, Mortgage Later
Nearly half of Gen Z name career advancement among highest priorities, ahead of homeownership, marriage or having children. Realtor.com’s Danielle Hale says: “They realize the affordability issue is a big one, but they’re not condemning themselves to renting in the future. What they’re doing instead is reframing the homeownership dream to focusing on career development, saving at the early age and being realistic about what they qualify for.” This career-centric mindset is especially strong among women, with 52% prioritizing job development over homeownership.
3. Struggling to Save
At the moderate home ask of $346,700, a 20% downpayment would be $69,340. But only 4% of Gen Z renters have over $50,000 in savings. At a moderate starter home at $200,000, the average 9% downpayment of $18,000 is too much for six in ten renters. With highrents in the national average at $1,494, and resumed student loan payments and average personal debts of $94,000, saving comes slowly.
4. Renting: A Lifestyle Option
By 2030, Gen Z will have become the largest cohort of American renters. Their surveys report that 83% believe renting enables them to save up to life experiences and 59% perceive it on a long-term, rather than stepstone, basis. Virginia Love of Entrata notes, ‘They don’t have to follow the traditional college-marriage-baby-house script they can create any life they want.” Renting also enables them to relocate where the job opportunity exists an important advantage in a decelerating labor market.
5. Boomer Bulge and Shortages in Housing
It’s undersupplied by 4.9 million units relative to the mid-2000s. Just 1.45 million new homes were completed in 2023, and baby boomers who now represent 42% of buyers buy in lots and retain big homes that they no longer need. This “housing ladder traffic jam” restricts access to family-size homes among younger buyers and postpones household formation.
6. Delayed Family Formation
Housing affordability is now shaping major family decisions. Chen Zhao at Redfin explains: “Some couples may decide to have children only after they have sufficient funds to afford a house of a given size or in a given location.” Higher prices per square foot and those have gone up by more than 51% since 2019 make it increasingly hard to afford space to accommodate growing families, and high rents and mortgages lower spending on kid-related expenses.
7. Creative Paths to Ownership
Some Gen Z buyers are finding success in more affordable Midwest and Southern markets. Co-ownership is also on the rise about a quarter have purchased homes with parents, and 22% with siblings, up sharply from previous years. Builders are responding with smaller homes, townhouses, and flexible layouts that allow for roommates or rental income often featuring separate entrances or extra bathrooms.
8. Long-Term Wealth Consequences
Waiting to buy a home may cost homeowners years of equity creation. Homeownership gives homeowners predictable payments, tax benefits, and appreciation that don’t come to renters. But future prospects indicate Gen Z incomes will grow from $9 trillion to $74 trillion in 2040 and may make the generation the wealthiest at age 50. This could put the entire wealth creation framework on a new schedule and redefine what the American dream becomes.
9. Financial Planning Strategies
Experts suggest beginning to save early, even if homeownership seems down the road. Side gigs, moving to lower-cost cities, and salary negotiation can give momentum. Lending access to more credit, experimenting with hybrid types of homeownerships such as community land trusts, and pushing for changes in zoning laws may also give more access to first-time buyers. In the meantime, establishing a good career and financial foundation remains the most sensible direction to go.
