Table of Contents Show

Millennials and Gen Z are entering the housing market with different goals, habits, and challenges than generations before them. From digital-first home searches to flexible work-from-anywhere mindsets, these younger buyers are reshaping how homes are bought—and where. While Millennials often focus on affordability and family-friendly suburbs, Gen Z is leaning into bold preferences like fixer-uppers, walkable cities, and even shared ownership. Their decisions aren’t just about price—they reflect shifting priorities, lifestyle changes, and a new definition of what “home” really means.

Current Homeownership Rates

Homeownership rate means the share of people who own the home they live in. For Gen Z adults, this rate is still low. In 2024, only about 26% of Gen Z adults owned a home, roughly the same as the two years before. That’s about one in four Gen Z adults. Gen Zers are mostly in their early 20s right now, so many are just starting their careers and may not be ready or able to buy yet.

For Millennials, who are older (late 20s to early 40s), the homeownership rate is higher. In 2024, around 54.9% of Millennials owned homes, which was basically unchanged from the year before. So a little over half of Millennials have bought homes. Before 2024, millennial homeownership had been rising each year since around 2012 as they aged into their 30s. But lately it has leveled off due to the tough housing market.

Historical Comparison

Young people today are lagging behind where older generations were at the same age. For example, about 33% of today’s 27-year-olds (older Gen Z) own their home, but 40% of Baby Boomers owned homes when they were 27. This shows it’s harder for young adults now to become homeowners as early as their parents or grandparents did.

Barriers to Homeownership

Housing Costs

A primary reason homeownership rates have stalled for young adults is cost. Home prices have climbed very high, and mortgage interest rates jumped from about 3% in early 2022 to around 7% by the end of 2022. Higher interest rates make monthly house payments more expensive. By spring 2024, the typical homebuyer’s payment was roughly $2,800 per month, an all-time high. Even though wages have gone up in recent years, they have not risen as fast as housing costs. This gap makes it especially hard for first-time buyers.

Housing Supply

Another factor is low housing supply. There aren’t many homes for sale in many markets, partly because older homeowners are staying put instead of selling. Fewer homes to buy means more competition and higher prices.

Renting vs. Buying Economics

Some young people have decided to keep renting because while buying got more expensive, the cost of renting stayed relatively flat. In fact, a majority of Gen Z and Millennial renters say they have thought about buying but haven’t been able to. In 2024, about 64% of Gen Z renters and 63% of Millennial renters said they had at least considered buying a home during their search for a rental. This shows the interest in owning is there, but the barriers are big.

Financial Readiness Factors

How financially prepared are Millennials and Gen Z to buy homes? We can compare their income, debt, savings, and credit situations.

Income Differences

Generally, Millennials (now in their 30s) have higher incomes than Gen Z (mostly in their 20s). Many Millennials are in established jobs or careers. Younger Gen Z adults are just starting out in entry-level jobs, so they typically earn less for now. For example, younger millennial home buyers (late 20s) had a median household income around $70,000. Gen Z buyers will often have lower incomes unless they have dual-income households or very high-paying jobs. Lower income means Gen Z may only qualify for smaller mortgages or need to look in cheaper areas.

Debt Burdens

Debt is a major hurdle for young buyers. Surprisingly, Gen Z carries more personal debt on average than Millennials. A recent poll found Gen Z adults carry about $94,000 in personal debt on average, compared to about $59,000 for Millennials. The majority of Gen Z’s debt comes from credit cards and student loans.

Millennials also have significant student loan debt (43% of younger millennial home buyers had student loans, with a typical balance of $30,000). High debt can make it hard to save for a down payment and can affect one’s ability to get a mortgage. Lenders look at how much debt you have relative to your income (the debt-to-income ratio) to decide if you can afford a home loan.

Credit Scores

A credit score is a number that shows how reliably someone pays back loans. Younger people often have slightly lower credit scores than older people simply because they haven’t had credit for as long. Still, Gen Z’s credit scores are decent. In Q3 2023, the average Gen Z FICO score was about 680, which falls in the “good” range. Millennials averaged slightly higher, around the high 680s (near 690). By comparison, the overall U.S. average score was 715 in 2024.

So Millennials and Gen Z are a bit below the national average, but not by much. A good credit score helps in getting a mortgage with a lower interest rate. One challenge for Gen Z is short credit history – they might have a fine score but a thinner record, which some lenders see as a risk. On the whole, though, many in both generations have credit scores in a range that could qualify for a home loan, provided their debt and income are in line.

Down Payment Challenges

Coming up with a down payment (often tens of thousands of dollars) is tough for many young buyers. The Freddie Mac survey noted that saving for a down payment was the number one hurdle Gen Z cited in buying a home. With high rents and debt payments, it can be slow to save such a large sum.

Alternative Down Payment Sources

Some Millennials and Gen Z get help from family. According to NAR data, 33% of younger millennials who bought homes received down payment assistance from family or friends.

Others live with parents or roommates longer to cut costs and save money – in fact, 25% of younger millennial buyers moved directly from a family member’s home into their purchased home. Strategies like these show how determined young people are to overcome the upfront cost. It’s challenging because as home prices rise, the needed down payment rises too. Many take a few extra years to gather enough savings.

Financial Readiness Summary

Millennials as a group have had more time to build careers and savings, but they also often seek more expensive homes (as they may have families or need more space). Gen Z is earlier in their journey, generally with lower incomes and high debt loads right now. Both groups feel the strain of affordability.

Housing prices relative to income are very high by historical standards, so even financially responsible young people can find homeownership hard to reach. Americans now need a six-figure income to afford a median-priced home in nearly half of U.S. states, which is daunting for recent graduates and young professionals.

Attitudes Toward Homeownership

The Dream Persists

Do young people today still dream of owning a home, or are they content with renting? Research shows that most Millennials and Gen Z do want to own homes eventually, but many are renting longer by necessity, and some are unsure if they’ll ever be able to buy in the current market.

A Freddie Mac survey of Gen Z adults (18-25) found that the vast majority view homeownership positively. Over 90% said owning a home provides privacy, independence, and is something to be proud of. So Gen Z does aspire to own. However, 34% of Gen Z in that survey said they feel homeownership might be financially out of reach for them. That share grew from a few years earlier, indicating more young people are worried about affordability.

Millennial Perspective Shift

Millennials generally share the homeownership dream. But having spent more years dealing with the housing market, some have adjusted their expectations. For example, some Millennials have decided to rent indefinitely rather than buy. In a 2022 survey, about 24.7% of Millennials said they plan to “always rent” instead of pursuing homeownership. This percentage was much higher than a few years before, suggesting more Millennials feel buying a house is unattainable or not the right choice for them.

The top reason was financial: about 74% of those always-rent Millennials said they can’t afford to buy a home. Other reasons included a desire for flexibility (not being tied down to one location) and avoiding the added maintenance and costs that come with owning a home. These attitudes show a mix of practicality and frustration – they value what a home could offer, but circumstances make renting the default.

Renting as a Temporary Stage

Even among those renting, homeownership is still a goal for most. Many young renters view renting as a temporary stage. In one survey, 84% of Gen Z and a similar share of Millennials said owning a home is part of the American Dream. They might not know when they’ll buy, but they haven’t ruled it out. They often say they’ll buy a home when (or if) they can afford to.

In summary, Millennials and Gen Z both see the long-term value of owning a home for stability and building wealth. High costs have forced many to delay buying, and some Millennials especially have made peace with renting for a longer time. However, few have truly given up on owning someday. Renting is often seen as a Plan B – it offers flexibility and lower up-front costs, which suit their current finances. But given the choice (and the money), most would prefer to own. The difference from older generations is mainly timing: younger people today often rent for several years longer than their parents did before buying their first house.

Technology’s Impact on Home Buying

Technology has dramatically changed the home-buying process for Millennials and Gen Z. These generations grew up with the internet, smartphones, and social media, so it’s natural that they use these tools extensively when shopping for homes.

Digital-First House Hunting

Both Millennials and Gen Z overwhelmingly start their home search online. They browse listings on websites and apps (like Zillow, Redfin, or Realtor.com) rather than looking at print ads or driving around hoping to spot “For Sale” signs. Online listings offer photos, virtual tours, and neighborhood information instantly.

More than half of recent renters or buyers say that seeing good photos and information online is essential in deciding whether a home is worth considering. Younger buyers also use interactive tools like map views and 3D home tours. This digital-first approach means by the time they visit a home in person, they often know a lot about it. It makes the process more efficient.

Social Media’s Growing Influence

Social media platforms have become surprisingly useful in real estate, especially for younger generations. A 2024 report found 41% of Gen Z and Millennial consumers use social media to learn about real estate. They follow accounts on Instagram or TikTok that show houses for sale, renovation tips, or advice on mortgages. Some real estate agents now showcase homes through TikTok videos or Instagram reels.

The top social platform for real estate browsing among young people is actually Facebook (many local community groups and marketplace listings for homes are there). About one in four young consumers has even used Facebook to find a real estate agent. Platforms like Instagram and YouTube also have influencers giving homebuying advice. This exposure helps demystify the process. For instance, seeing a peer post “Just bought my first house!” along with how they did it can inspire others.

Social media can also educate: short videos might explain how mortgages work or how to improve your credit to buy a house. Essentially, information that used to come from a seminar or pamphlet is now in the palm of their hand in a fun, bite-sized format.

The Informed Buyer

Technology and social media have made Millennials and Gen Z very proactive and informed home shoppers. They use Zillow and other real estate apps as a starting point for any house hunt. They leverage social networks to gather tips and even find professionals. This means they often approach homebuying with more knowledge (and sometimes more opinions) than previous generations did at the start.

The real estate industry has adapted by offering virtual tours, online applications, and active social media engagement to meet the expectations of these digital-native buyers. Gone are the days of flipping through a thick binder of listings at an agent’s office – now it’s swipe, click, and scroll, which is exactly how Millennials and Gen Z like to do business.

Geographic Preferences

Regional Trends for Gen Z

Gen Z buyers are finding more success in affordable areas, especially the Midwest and South. Recent data show high Gen Z home-buying activity in cities like Des Moines, Iowa and Omaha, Nebraska, where home prices are well below the national median. In contrast, Gen Z makes up only a tiny share of buyers in expensive markets like coastal California (for example, just ~4% in San Jose), since prices there are largely out of reach.

Millennial Migration Patterns

Millennials have also migrated toward more affordable regions. Over the past few years, many left high-cost cities and moved to places like Texas, Arizona, or the Southeast to buy homes. By 2020, nearly half of Millennials lived in suburbs rather than big cities. They often seek areas where their money goes further.

In some states like New York and Massachusetts, however, Millennials still make up the majority of homebuyers (likely because younger people are the ones buying, as older generations already own their homes). Both Gen Z and Millennials show a willingness to relocate in order to afford a home. In one survey, 38% of Gen Z said they would consider moving to a different city or state to buy a home. Indeed, we have already seen many Millennials do exactly that for better affordability.

Future Outlook

What can we expect in the future for Millennial and Gen Z homeownership? While no one can predict perfectly, experts have some educated guesses based on trends.

Millennial Trajectory

For Millennials, many of whom are now in their 30s, homeownership rates will likely continue to rise gradually as more of them reach their 40s. People tend to buy homes as they get older and more financially secure. The average age of first-time homebuyers is now around 36-38 years old, an all-time high. That suggests Millennials are simply buying later in life than previous generations did.

In fact, Millennials recently became a homeowner-majority generation — over half now own homes. That majority is expected to grow. By the time the youngest Millennials reach their 40s in the next decade, their homeownership rate could approach what Gen X has now (since many will have overcome early obstacles by then).

Gen Z’s Path Forward

For Gen Z, the timeline is just beginning. The oldest Gen Zers are mid-20s, and only a quarter of Gen Z adults are homeowners so far. But as they move into their late 20s and 30s over the next decade, we can expect more to start buying, assuming the economy allows. Gen Z is very eager — one survey found 67% of Gen Z respondents plan to buy a home in the next few years (though many will likely need longer).

A key factor will be housing affordability. If home prices stabilize or if more starter homes are built, that will help Gen Z tremendously. There is some hope that more homes will open up: as Baby Boomers age, many will downsize or pass on their properties. Freddie Mac researchers predict more than 9 million homes will be released onto the market by baby boomers between now and 2035. This “silver tide” of inventory could gradually make it easier for younger buyers to find a home, especially in the 2030s.

New Homeownership Patterns

Overall, both generations are likely to increase their homeownership rates in the coming years, but at a slower pace than previous generations. High costs and economic uncertainties have simply stretched out the timeline. The concept of when it’s “normal” to buy a first home has shifted – for Millennials and Gen Z, it may be late 30s instead of mid 20s. Nonetheless, the dream of homeownership is still alive. It might just require more patience and creativity to achieve.

We may see more cases of young people buying smaller homes or condos as their first purchase, or teaming up with a partner or friends to buy a property together. Over time, as they build equity and incomes rise, they can move up to their long-term homes.

Conclusion

Millennials and Gen Z have faced more obstacles to buying homes than some earlier generations did, but they are finding ways to overcome them. Millennials are now becoming homeowners later in life, and Gen Z will likely follow a similar pattern.

With the housing market slowly adjusting (and possibly more inventory on the horizon), many experts believe young adults today will eventually catch up. The houses they buy might be more modest starter homes or in different locations than their parents’ generation, but with determination, they are carving out their own version of the American Dream.

The one-in-four Gen Z homeownership rate today could very well become one-in-two in the future, following the path that Millennials are already on.

Home-Buying Trends: Millennials vs. Gen Z

Current Homeownership Rates

Historical Comparison