GEN ZERS OUTPACE OTHERS IN HOMEOWNERSHIP

GEN ZERS OUTPACE OTHERS IN HOMEOWNERSHIP

Most adult Gen Zers are tracking ahead of where their parents were at the same age, likely because they bought when rates were near record lows.

SEATTLE— More than a quarter (26.3%) of adult Gen Zers owned a home in 2023, little change from the previous year. At the same time, homeownership among millennials and Gen Xers rose over the same period, the online real estate brokerage Redfin reported. And the rate for baby boomers changed little (78.8% vs 78.7% in 2022), down from a record 79.7% in 2020.

The homeownership rate for adult Gen Zers, aged 19 to 25, likely moved sideways in 2023 because it was a tough year to buy a home – mortgage rates surpassed 8% for the first time since 2000 and housing prices remained stubbornly high, causing homebuyer mortgage payments to soar, Redfin reported. While that posed challenges for house hunters across generations, it was particularly difficult for America’s youngest homebuyers as they start their career without significant savings or wealth from the sale of a previous home.

Even though the homeownership rate for adult Gen Zers has stagnated, most of them are still outpacing young people of the past.

The homeownership rates for adult Gen Zers are higher than the homeownership rates were for millennials and Gen Xers when they were the same age. For example, the rate for 24-year-old Gen Zers is 27.8%, compared with 24.5% for millennials when they were 24 and 23.5% of Gen Xers when they were 24.

This is likely because many Gen Z homeowners bought during the pandemic, when mortgage rates hit a record low. When many millennials were in their early twenties, many were struggling to find work due to the Great Recession, which made it harder to afford a home. And when Gen Xers were in their early twenties, they were grappling with some of the highest mortgage rates in history; for example, rates were around 11% in 1989, when the oldest Gen Xers were 24.

In the coming months, things will be even more upbeat for Gen Z, Redfin said.

“The recent decline in rents means Gen Zers can put more money toward saving for a down payment,” said Redfin Chief Economist Daryl Fairweather. “Plus, the job market is strong, and career opportunities have become less concentrated in expensive cities during the remote work era, meaning many Gen Zers can choose to live somewhere more affordable.”

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