Generation Z has taken the lead in the homeownership race.
In 2023, the homeownership rate for Gen Z adults, or those ages 19 to 26, was higher than the homeownership rate for millennials and Gen Xers when they were 24, according to real estate company Redfin.
But the race is close. About 27.8% of Gen Zers who are 24 years old own a home, compared with 24.5% of Millennials at the same age. The homeownership rate among Gen Xers was lower at 23.5%, Redfin reports.
“I’m very happy to buy a house,” said homeowner Dominic Vericcia, 24, who bought his home in Ventura City, New Jersey, in October 2020, when the 30-year fixed mortgage rate was 2.83%, according to Freddie Mac.
“I didn’t know if I made the right decision (to buy a house),” Vericia said. “I didn’t know if it was going to turn my life upside down.”
Gen Z makes up just 3% of homebuyers, according to a report from the National Association of Realtors. This generation enters homeownership with the lowest incomes and is less likely to be married or have children under the age of 18 at home.
In 2023, nearly three-quarters of Gen Zers said they plan to buy a home within six years, even though the market is tough for buyers, according to Rocket Mortgage, a mortgage lender.
“The housing market right now is very tough,” said Jessica Lutz, chief economist for the National Association of Realtors. “We have a very limited inventory of housing, and we’ve had a very limited inventory of housing for a long time. That has driven up home prices at the same time that interest rates are at a higher point than they’ve been in the last few years, which makes the housing market really unaffordable.”
How can Gen Z afford to buy homes sooner than their older peers, and what implications might this have for the U.S. housing market and economy?
Watch the video above to see how Gen Z is winning the homeownership race and how they compare to past generations when they were the same age.
