Gen Z struggles with homeownership due to high costs

The rate of homeownership among Gen Z has stalled, as many young people find themselves unable to afford homes. According to a new report by Redfin, only 26.1 percent of Gen Zers owned their homes in 2024, a slight decrease from previous years. High home prices, rising mortgage rates, and limited housing supply have made it difficult for young Americans to buy property. Many Gen Zers have not had enough time to build wealth compared to older generations and face high costs that make homeownership out of reach. Between 2017 and 2022, the homeownership rate for Gen Z increased each year, but that trend has changed recently. As mortgage rates surged from around 3 percent at the start of 2022 to approximately 7 percent by the end of that year, affordability became a significant issue. By spring 2024, typical homebuyers were paying around $2,800 per month, an all-time high. Older homeowners are retaining their low mortgage payments, which limits available homes for younger buyers. Many Gen Zers are now choosing to rent or live with family, valuing flexibility over the stability of owning a home. In contrast, homeownership rates for older generations, like Gen X and Baby Boomers, have risen. In 2024, 72.9 percent of Gen Xers and 79.6 percent of Boomers owned homes, highlighting a gap between the generations. Daryl Fairweather, Redfin’s Chief Economist, noted that while owning a home is still seen as a mark of success, younger people are focusing more on flexibility. Some may invest in stocks, businesses, or education rather than real estate. For many in younger generations, the path to homeownership is more challenging than it was for their parents and grandparents. While some may still try to buy homes, most are waiting for better options.