From digital-first home searches to flexible work-from-anywhere mindsets, these younger buyers are reshaping how homes are boughtand where.
Current Homeownership Rates
Homeownership rate means the share of people who own the home they live in.
For Gen Z adults, this rate is still low.
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Thats about one in four Gen Z adults.
For Millennials, who are older (late 20s to early 40s), the homeownership rate is higher.
In 2024, around 54.9% of Millennials owned homes, which was basically unchanged from the year before.
So a little over half of Millennials have bought homes.
Before 2024, millennial homeownership had been rising each year since around 2012 as they aged into their 30s.
But lately it has leveled off due to the tough housing market.
Historical Comparison
Young people today are lagging behind where older generations were at the same age.
This shows its harder for young adults now to become homeowners as early as their parents or grandparents did.
Higher interest rates make monthly house payments more expensive.
By spring 2024, the typical homebuyers payment was roughly $2,800 per month, an all-time high.
Even though wages have gone up in recent years, they have not risen as fast as housing costs.
This gap makes it especially hard for first-time buyers.
Housing Supply
Another factor is low housing supply.
Fewer homes to buy means more competition and higher prices.
This shows the interest in owning is there, but the barriers are big.
Financial Readiness Factors
How financially prepared are Millennials and Gen Z to buy homes?
We can compare their income, debt, savings, and credit situations.
Many Millennials are in established jobs or careers.
Younger Gen Z adults are just starting out in entry-level jobs, so they typically earn less for now.
For example, younger millennial home buyers (late 20s) had a median household income around $70,000.
Gen Z buyers will often have lower incomes unless they have dual-income households or very high-paying jobs.
Lower income means Gen Z may only qualify for smaller mortgages or need to look in cheaper areas.
Debt Burdens
Debt is a major hurdle for young buyers.
Surprisingly, Gen Z carries more personal debt on average than Millennials.
The majority of Gen Zs debt comes from credit cards and student loans.
Credit Scores
A credit score is a number that shows how reliably someone pays back loans.
Still, Gen Zs credit scores are decent.
Millennials averaged slightly higher, around the high 680s (near 690).
By comparison, the overall U.S. average score was 715 in 2024.
So Millennials and Gen Z are a bit below the national average, but not by much.
A good credit score helps in getting a mortgage with a lower interest rate.
With high rents and debt payments, it can be slow to save such a large sum.
Alternative Down Payment Sources
Some Millennials and Gen Z get help from family.
Strategies like these show how determined young people are to overcome the upfront cost.
Its challenging because as home prices rise, the needed down payment rises too.
Many take a few extra years to gather enough savings.
Gen Z is earlier in their journey, generally with lower incomes and high debt loads right now.
Both groups feel the strain of affordability.
A Freddie Mac survey of Gen Z adults (18-25) found that the vast majority view homeownership positively.
Over 90% said owning a home provides privacy, independence, and is something to be proud of.
So Gen Z does aspire to own.
That share grew from a few years earlier, indicating more young people are worried about affordability.
Millennial Perspective Shift
Millennials generally share the homeownership dream.
But having spent more years dealing with the housing market, some have adjusted their expectations.
For example, some Millennials have decided to rent indefinitely rather than buy.
Renting as a Temporary Stage
Even among those renting, homeownership is still a goal for most.
Many young renters view renting as a temporary stage.
They might not knowwhentheyll buy, but they havent ruled it out.
They often say theyll buy a home when (or if) they can afford to.
However, few have truly given up on owning someday.
But given the choice (and the money), most would prefer to own.
Technologys Impact on Home Buying
Technology has dramatically changed the home-buying process for Millennials and Gen Z.
Digital-First House Hunting
Both Millennials and Gen Z overwhelmingly start their home search online.
Online listings offer photos, virtual tours, and neighborhood information instantly.
Younger buyers also use interactive tools like map views and 3D home tours.
It makes the process more efficient.
Some real estate agents now showcase homes through TikTok videos or Instagram reels.
About one in four young consumers has even used Facebook to find a real estate agent.
Platforms like Instagram and YouTube also have influencers giving homebuying advice.
This exposure helps demystify the process.
For instance, seeing a peer post Just bought my first house!
along with how they did it can inspire others.
They use Zillow and other real estate apps as a starting point for any house hunt.
They leverage social networks to gather tips and even find professionals.
Millennial Migration Patterns
Millennials have also migrated toward more affordable regions.
By 2020, nearly half of Millennials lived in suburbs rather than big cities.
They often seek areas where their money goes further.
Both Gen Z and Millennials show a willingness to relocate so that afford a home.
Indeed, we have already seen many Millennials do exactly that for better affordability.
Future Outlook
What can we expect in the future for Millennial and Gen Z homeownership?
While no one can predict perfectly, experts have some educated guesses based on trends.
People tend to buy homes as they get older and more financially secure.
The average age of first-time homebuyers is now around 36-38 years old, an all-time high.
That suggests Millennials are simply buying later in life than previous generations did.
In fact, Millennials recently became a homeowner-majority generation over half now own homes.
That majority is expected to grow.
Gen Zs Path Forward
For Gen Z, the timeline is just beginning.
The oldest Gen Zers are mid-20s, and only a quarter of Gen Z adults are homeowners so far.
A key factor will be housing affordability.
If home prices stabilize or if more starter homes are built, that will help Gen Z tremendously.
High costs and economic uncertainties have simply stretched out the timeline.
Nonetheless, the dream of homeownership is still alive.
It might just require more patience and creativity to achieve.
Over time, as they build equity and incomes rise, they can move up to their long-term homes.
Millennials are now becoming homeowners later in life, and Gen Z will likely follow a similar pattern.
