Gen Z Looks to Catch Up on Homeownership

Gen Z’s homeownership rate stagnated in 2023, but Millennials and Gen Xers saw gains, Redfin said.

By Richard Berger | January 19, 2024

The recent decline in rents means Gen Zers can put more money toward saving for a down payment, according to a new report from Redfin.

Its Chief Economist Daryl Fairweather said in prepared remarks that housing affordability remains strained, “but things are looking up for Gen Z.”

Gen Z’s homeownership rate stagnated in 2023, but Millennials and Gen Xers saw gains, the report showed.

For Gen Z, Fairweather added that the strong job market and because career opportunities have become less concentrated in expensive cities during the remote work era, Gen Zers can choose to live somewhere more affordable.

For Gen Z, 26% of adult Gen Zers owned a home in 2023, about the same as in 2022. However, the homeownership rate for Millennials rose to 55% from 52%, and the rate for Gen X climbed to 72%.

The report suggested that the homeownership rate for adult Gen Zers likely moved sideways in 2023 because it was an especially hard year to buy a home.

Mortgage rates topped 8% for the first time since 2000 and housing prices remained stubbornly high.

“Many from Gen Z simply could not afford elevated mortgage payments as they “don’t have significant savings or wealth from the sale of a previous home,” Redfin said.

Mortgage rates have dropped from those 2023 highs and are moving in the mid to upper 6% range currently.

“The drop in rates is bringing both buyers and sellers off the sidelines,” Redfin said. “And an increase in sellers has fueled a jump in new listings, which is giving buyers more options to choose from and could ultimately put downward pressure on prices.”

Jon Byram, a Redfin real estate agent in Northern Virginia, said Gen Z is poised to play the housing market.

“They have done their research,” Byram said. “They know all of the real estate jargon and are entering the housing market more educated than prior generations.

“Some young first-time buyers are also coming in with financial help from family, or co-buying with family members, which boosts their buying power. And some have savings because they’ve been living with their family rent-free.”