Is Gen Z Ready for Homeownership? The Real Story
Gen Z is financially savvy, with nearly half planning to buy a home by 2029, according to Realtor.com®. They’re saving at higher rates than older generations, yet homeownership remains a challenge. Here’s why.
Gen Z’s Impressive Savings Habits
Gen Z knows how to save:
– 25% set aside 11–20% of their income.
– 12% save 21–30%.
– 5% save their *entire* paycheck.
That’s more than millennials, 26% of whom save nothing each month. Even boomers are falling behind, with 32% admitting they don’t save at all.
So why isn’t Gen Z buying homes?
The Homeownership Hurdles
Despite strong savings, Gen Z faces steep financial barriers:
– Lower Incomes – With an average salary of $45,000, they’re starting at the bottom of the earnings ladder.
– High Housing Costs – They spend 37% of their income on mortgage payments—much higher than the 26% average for buyers.
– Rising Rent & Interest Rates – High costs make homeownership a stretch, even with solid savings.
– Side Hustle Nation – Many are taking on extra jobs just to keep up.
Where & How Gen Z Is Buying
Affordable Midwest cities are attracting Gen Z buyers, with Akron, OH, emerging as a hotspot. In 2024, 13% of home purchase applications came from Gen Z, up from 10% the year before.
Many are turning to creative strategies:
– Co-buying with friends or family.
– House hacking—renting out part of their home.
– Moving to lower-cost areas where their money stretches further.
The Down Payment Reality
A 20% down payment? Not necessary. First-time buyers are putting down just **9% on average**, meaning a $400,500 home would require about $36,045 upfront. But with mortgage rates hovering around 7%, renting remains the more affordable option for many.
The Future of Gen Z Homeownership
Gen Z isn’t giving up. While affordability challenges persist, they’re finding smart ways to enter the market—on their own terms. Whether through strategic savings, shared buying power, or alternative housing solutions, they’re proving that homeownership is still within reach.
Source: realtor.com
