Why Gen Z is tabling homeownership for now
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Illustration: Maura Losch/Axios
Steep housing costs are putting Gen Z's homeownership dreams on hold.
The big picture: Gen Zers, roughly those aged 12-27, feel deeply pessimistic about the world around them, Axios' Erica Pandey reports.
- For this article, we're focusing on the adult cohort.
What they're saying: "We all want to own a property, but if you don't come from money it can be difficult to imagine owning a home before your late 20s/early 30s," Colorado native Veronica Randolph tells us.
Zoom in: The 24-year-old content creator says she wants to own a home by age 30, but it won't be in Denver. The cost of living makes it nearly impossible to save up for the hefty down payment needed in Denver's pricey market, she says.
- If she does buy in the future, she'll likely do so with her partner near family in the Caribbean.
State of play: Many younger adults are struggling to swing pricey rents and are returning to their childhood bedrooms or basements. Others are splitting the bill with roommates.
- Over half of U.S. adult men (57%) and women (55%) under 25 lived in their parents' home in 2022, an arrangement that's become more common in the past several decades, new census data shows.
The latest: Fewer than one in five adult Gen Zers (18%) either own a home or are married to someone who does, according to a recent analysis by John Burns Research and Consulting.
We caught up with the firm's chief demographer, Chris Porter, about Gen Z and how the cohort is shaping the real estate industry.
- This interview has been lightly edited.
Does Gen Z care about becoming homeowners?
Our research shows the majority of young adults still hope and expect to own a home. At this stage in their lives, homeownership seems less important, because it feels so far out of reach. The cost of getting into your first home is so much more expensive than it has been historically.
People are getting married and having kids later in life, so it follows that they're maybe putting homeownership off a little longer. We also see some waiting because they want to save up for something nicer down the road.
Some reports suggest higher homeownership rates among Gen Z. What's driving the disconnect?
Analysts often aren't looking at the entire adult population of Gen Z. That can be a little misleading, because in order to be included in the "homeownership rate," you have to have formed your own household. For younger people, even that is tough in and of itself.
How might homebuilders cater to Gen Z?
Gen Z is open to compromise on some home features, including space to entertain. Many say they're willing to accept less than a two-car garage.
The kitchen doesn't have to be huge, but it needs to have the essentials. There's a misconception that Gen Zers DoorDash everything.