More Gen Zs are putting homeownership dreams on hold
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Steep housing costs are putting homeownership dreams for many Gen Zers on hold, especially in pricey markets like Seattle, a new survey shows.
Why it matters: 63% of Gen Z and younger millennials want to become homeowners, but Gen Z faces a huge hurdle raising enough money for a down payment and closing costs, Re/Max found.
- One in three Gen Zers (34%) surveyed by Freddie Mac say owning a home feels impossible in their lifetime, up from 27% in 2019.
Zoom in: Young first time buyers looking for a three-bedroom, two-bedroom townhouse in Seattle can be very discouraged by the typical $850,000 price tag and $5,000 to $5,500 monthly mortgage, John Manning, managing broker for Re/Max Gateway in Seattle, told Axios.
- Even so, among new mortgages in the Seattle metro area in 2023, nearly 43% were taken out by Gen Zers and young millennials, according to a recent Redfin report.
Yes, but: Seattle's figures may be inflated by the significant number of tech workers with high salaries in the region, Manning said, and that doesn't mean young working and middle class people aren't still struggling to become homeowners.
State of play: Many younger adults are grappling with pricey rents and some are returning to their childhood bedrooms or basements while 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, recent census data shows.
Reality check: Fewer than 1 in 5 adult Gen Zers (18%) nationwide either own a home or are married to someone who does, according to a recent analysis by John Burns Research & Consulting.
- Research shows the majority of young adults still hope and expect to own a home, but at this stage in their lives homeownership feels out of reach, Chris Porter, the chief demographer for John Burns, told Axios.
- Plus, the cost of getting into a first home is so much more expensive than it has been historically, Porter said.
- People are also getting married and having kids later in life, so it follows that they're maybe putting homeownership off a little longer, he said.
What we're watching: Gen Zers who are not able to buy are increasingly looking for workarounds and ways to share space.