{"id":171233,"date":"2024-04-26T12:59:10","date_gmt":"2024-04-26T18:59:10","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=171233"},"modified":"2024-04-26T12:59:40","modified_gmt":"2024-04-26T18:59:40","slug":"gen-z-homeownership-outpacing-parents","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/gen-z-homeownership-outpacing-parents","title":{"rendered":"Gen Z Is Dominating Their Parents in Homeownership\u2014According to New Report"},"content":{"rendered":"\n

When it comes to homeownership, Gen Z might be ahead of the curve. <\/span>According to data from real estate firm Redfin, more Gen Zers owned their <\/span>home<\/span> at 24 than their parents <\/span>did<\/span> (millennials and Gen Xers) when they were the same age.<\/span><\/p>\n\n\n\n

While homeownership rates stagnated in 2023 due to increased interest rates and housing prices remaining willfully high, Gen Z still seems better equipped to achieve the American dream of homeownership. <\/span><\/p>\n\n\n\n

Daryl Fairweather, chief economist at Redfin, <\/span>said in a press release<\/span><\/a>: <\/span>\u201cHousing affordability remains strained, but things are looking up for Gen Z. The recent decline in rents means Gen Zers can put more money toward saving for a down payment. Plus, the job market is strong, and career opportunities have become less concentrated in expensive cities during the <\/span>remote work era<\/span><\/a>, meaning many Gen Zers can choose to live somewhere more affordable.\u201d<\/span><\/em><\/p>\n\n\n\n

What the Numbers Say<\/span><\/h2>\n\n\n\n

Just over<\/span> a quarter (26.3%) of Gen Zers owned a home in 2023, <\/span>pretty much<\/span> flat compared to 26.2% in 2022.<\/span> <\/span>Redfin\u2019s data<\/span><\/a> included only adult Gen Zers (those aged 19-26).<\/span><\/p>\n\n\n\n

While homeownership numbers stagnated for the TikTok generation, they are still ahead of where their parents were at the same age. For example, around 27.8% of 24-year-old Gen Zers own a home, while only 23.5% of Gen Xers,\u00a0who are\u00a0generally the parents of Gen Z,\u00a0owned\u00a0homes at that age. Meanwhile, 24.5% of millennials owned homes at the same age.<\/span><\/p>\n\n\n\n

\"Homeownership
Homeownership rates by generation (1977-2023) – Redfin<\/a><\/em><\/figcaption><\/figure>\n\n\n\n

Many Gen Z adults who own a home bought during the pandemic when they <\/span>were able to<\/span> benefit from record-low interest rates.<\/span> The economy looked very different from when their parents and millennials entered the workforce. <\/span><\/p>\n\n\n\n

Gen Xers had to contend with an early-\u201990s recession, while older millennials started working during the Great Recession. <\/span>Still, all three generations lag behind baby boomers, a generation in which 35.6% owned a home by <\/span>the<\/span> age <\/span>of<\/span> 26.<\/span> <\/span><\/p>\n\n\n\n

Numerous factors contribute to this generational gap, the biggest being the <\/span>unaffordability of homes<\/span><\/a>. Younger generations are also achieving key milestones like marriage and having kids later than their parents and grandparents did, which means they can hold off buying starter homes.  <\/span><\/p>\n\n\n\n

How Can Gen Z Buy Homes So Young?<\/span><\/h2>\n\n\n\n

So how can Gen Z afford to buy homes at such a young age?<\/span><\/p>\n\n\n\n

Some may be getting help from their parents or <\/span>are able to<\/span> save more for a <\/span>down payment<\/span><\/a> because they live with their parents rent-free. According to <\/span>Statista<\/span><\/a>, over 50% of 18-to-24-year-olds lived with their parents in 2023.<\/span><\/p>\n\n\n\n

In general, Gen Z tends to be financially savvy, said Jon Byram, a Redfin real estate agent in Northern Virginia, in the Redfin press release. He said <\/span>in a statement<\/span> that Gen Z has done their research and is more educated than prior generations: \u201cMy youngest buyers handled the pandemic homebuying frenzy the best. Some older buyers had trouble grappling with the significant changes <\/span>that had occurred<\/span> in the market since the last time they purchased a house.\u201d<\/span><\/p>\n\n\n\n

Gen Zers are also purchasing smaller homes in different locations than older generations<\/span>, according to <\/span>a different Redfin report<\/span><\/a>. In 2022, when most Gen Zers bought homes, their typical residence cost $235,000, compared to $355,000 for 25-to-34-year-olds and $405,000 for 45-t0-54-year-olds. Many bought in smaller metro areas such as Virginia Beach, Cincinnati, and Detroit, taking advantage of <\/span>the remote working policy of many companies<\/span>.<\/span><\/p>\n\n\n\n

The Bottom Line<\/span><\/h2>\n\n\n\n

Gen Zers are currently aged 12 to 27, which means some aren\u2019t even in the workforce yet, and those <\/span>that are still<\/span> should see a lot of earnings potential. This younger generation is ahead of their parents and millennials. While they might not catch up with the real estate buying power of baby boomers anytime soon, many seem to have the financial know-how to make homeownership a reality sooner than later.<\/span><\/p>\n\n\n\n

Although <\/span>interest rates<\/span><\/a> are still relatively high and housing prices aren\u2019t cooling, Gen Zers who didn\u2019t buy during the pandemic have plenty of time to keep saving and make a plan for homeownership when the market is right. <\/span><\/p>\n\n\n\n

Real estate investors will see a new generation of homebuyers\u00a0in the coming years,\u00a0with different styles, tastes, and\u00a0<\/span>financial habits<\/span><\/a>.\u00a0As the first generation of digital natives, social media and online advertising have always been part of their lives. Understanding how to market to these younger, tech-savvy homebuyers will require new ways of\u00a0thinking about\u00a0selling, as Gen Zers know when they are being sold to and aren’t afraid to call it as they see it.<\/span><\/p>\n\n\n\n \n

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When it comes to homeownership, Gen Z might be ahead of the curve. According to data from real estate firm Redfin, more Gen Zers owned their home at 24 than their parents did (millennials and […]<\/p>\n","protected":false},"author":613681,"featured_media":171236,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[8],"tags":[],"class_list":["post-171233","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-real-estate-trends"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/171233","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/613681"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=171233"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/171233\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/171236"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=171233"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=171233"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=171233"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}