In 2023, the homeownership rate for adult Gen Zers, those 19 to 26 years old, was higher than the homeownership rate for millennials and Gen X when they were 24. The race is close though, 27.8% of 24-year-old Gen Zers are homeowners, compared to 24.5% of millennials when they were the same age. Gen X had a lower rate at 23.5%. I'm so happy with buying a home, and in the moment, I didn't know if I was making the right call. Who knows the bad things that can happen if you really don't make ends meet after you buy a home. But fortunately, I did get through it, and I think I'm in a way better place now. Gen Z makes up only 3% of home buyers. This generation is entering homeownership with the lowest income and is unlikely to be married or have

children under 18 in their household. In 2023, almost three-quarters of Gen Zers said they planned to buy a home within six years, even though the market is tough for buyers. It is an incredibly difficult housing market right now. We have very limited housing inventory, and we have had very limited housing inventory for a long period of time. It's pushed up home prices at the same time that interest rates are at a higher point than they have been in the last few years. So how is Gen Z affording homes sooner than their elders could? And what implications will that have for the housing market and US economy? In January 2021, the 30-year fixed mortgage rate hit a record low. I signed less than 3% on my mortgage, which is, you know, an astronomical low that's historic. So I probably will never give that up. I won't buy until either. I don't need a mortgage.

I can make an equity transaction. Gen Z was looking like they were doing better than millennials, better than Gen X, because they were buying homes at a faster rate. But I think a lot of that had to do with how low interest rates were during those years, and remote work opening up more possibilities for Gen Zers to buy homes in places that are more affordable. I had just turned 21 years old when I bought my home. Dominic purchased his first home in October 2020 for about $200,000. He previously rented it while attending nearby Stockton University. I did not want to pay over $1,200 a month to live on campus, and I just didn't see the value in doing that. During that time with the mortgage rates, it was cheaper for me to buy a home than it was to live on campus. Most Gen Zers were making their purchases in the Midwestern region.

Areas like Lincoln, Nebraska, Toledo, Ohio, South Bend, Indiana, Tuscaloosa, Alabama, and Eugene-Springfield, Oregon, were popular with Gen Z homebuyers. About 28% of homeowners in Lincoln, Nebraska, are part of Generation Z. Gen Z may be moving there because the median property value was nearly $200,000 in 2022, while the national average was around $500,000 that same year. Gen Z also bought homes in places like Virginia Beach, Virginia, Cincinnati, Ohio, Detroit, Michigan, St. Louis, Missouri, and Indianapolis, Indiana. The typical home purchased by Gen Z in these areas cost $255,000 or less in 2022. Gen Z buyers are purchasing at the lowest household incomes of all home buyers out there, so they're making the most financial sacrifices, but they're also making compromises on the home, such as the condition or the age of the home.

When they were younger, millennials were more inclined to live in urban areas. Cities like Boston, San Francisco, Seattle, and Washington, D.C., had a high share of 18 to 24-year-old homebuyers in the mid-2010s. But millennials faced the Great Recession when they entered the housing market in the late 2000s. Because of those housing barriers, millennials were more likely to stay in their parents' home for a longer time than previous generations. Gen Z has learned from millennials before them. They've learned about student loan debt. They're weighing their pros and cons when they go to college, and they're being financially savvy when they think about where they want to place their money and what they want to do with it. And it seems to be housing. While some Gen Zers bought homes, there are more living at home with their parents. 31% of Gen Z live in their parents' home currently. Meanwhile, boomers, those born between 1946 and 1964, began buying homes

during the 1970s and early 1980s, when the 30-year fixed mortgage spiked over 18%. During 1970, when the oldest boomer was 24. The majority of US homeowners in a two or more person household under 25 lived in the southern region. In addition to the easy interest rate environment housing advantage, some Gen Zers were able to get a head start from their family members. More than 36% of Gen Z and millennials who plan to purchase are expecting their family to help them with the down payment. I had my parents cosign on the mortgage because at that age, you, regardless of your credit, you pretty much have to have a cosigner. And and I understand that not not everybody has that opportunity. If a Gen Z member was in a good economic position, they had a job or they had help from family to afford a home, and they were able to buy a home, and they made out really well, because home values went up.

considerably from 2021 to where we are now. An average American home in the second quarter of 2024 cost a little over $501,000. In February 2020, homebuyers needed to earn just over $40,000 in annual income to qualify for a starter home. Today, a first-time buyer needs to make around $76,000 to afford a typical starter home in the US. 2020 experienced new lows for mortgage rates. The 30-year fixed rate was just under 3%. The typical age of a first-time buyer in 2023 was 35; in New Jersey, the median age was 49. Similar to the average age, the median price of a home in New Jersey grew. The median price of a home for sale in the state of New Jersey right now exceeds $500,000, and that's up over $100,000 from where it was even two years ago. So, what we're seeing is a market that is increasingly constrained in terms of opportunity for first-time

homebuyers and for homebuyers seeking to trade up in houses because of the market compression that we're observing, as well as the tremendous amount of demand. Our population is growing year over year, and the number of buyers seeking to purchase homes at the median and lower end of the market continues to climb. Melanie is a director at the New Jersey Housing and Mortgage Finance Agency. She and her team help first-time homebuyers who are trying to find homes but can't afford the additional cost to jumpstart their process. Just 14 states, including New Jersey and one US territory, offer homeowner assistance funding. The others have either suspended their programs or are awaiting waitlist applications. Across the state, as much as a quarter of families are now coming in with a substantial down payment, often supported by parents, loved ones, significant others that are not necessarily co-borrowers. When the market is this tight, any kind of a cash infusion can help you to access a home, and so that

pressure is increasingly making it difficult for first-time homebuyers who aren't selling a house and taking that nest egg to buy the next house. Over three quarters of Gen Z homebuyers have received help on down payments. We're very conscious about trying to find ways to help first-time homebuyers invest and become homeowners while those houses are on the market, so that they can really enjoy that opportunity themselves. And so that we see that direct investment. When you live on a street, you care about the sidewalk, you care about the schools, you care about the lighting. So we view it not just as helping that individual, but as helping that community. Along with the generational trends in home buying, experts are also seeing a change in who is living inside their homes. Gen Z as home buyers, they're more likely to be single than they are to be partnered. So they're doing this actually on their own, which is really interesting when we think about affordability.

conditions. Half of them are single as they go into home buying. We also know they plan on holding their home for a longer period of time than we saw for young millennial buyers at the same age. Like Gen Z, millennials are also more likely to move in alone. 42% of millennial home buyers have purchased their homes alone. Only 34% of Gen X are independent home buyers. Experts say this trend speaks to how the younger generations are delaying or forgoing marriage altogether. But those who are interested in purchasing alone could have a harder time qualifying for a mortgage. Mortgage lenders look at annual salaries to determine how much a potential client can afford to borrow. This could potentially affect Gen Z because they are most likely receiving entry-level salaries. They owe a substantial amount of debt compared to their parents when they were the same age, and they're grappling with the high cost of living from inflation. Gen Z homebuyers have comparatively lower incomes compared to other homebuyers because they are

just starting out in their careers. So they're competing against Gen X and millennial home buyers who've been in the marketplace longer and who were closed out in the last decade from home purchases. Roughly 38% of Gen Zers and millennials believe they have a harder time building financial wealth than their parents did because they feel left behind by the economy, while 17% believe they have it easier. And in some ways, Gen Z may be right. Although Gen Z is in fact making more money than their parents did at the same age, they've racked up more debt than their parents. An 18 to 24-year-old in 2022 made $20,000 in wages after adjusting for inflation. That's nearly $5,000 more than what 18 to 24-year-olds made in 1992. Yet, Gen Z carries more student loans and mortgage debt than their parents. The average 18 to 24-year-old in 2022 held $117,000 in mortgage

debt, while the same age group in 1992 owed $39,367. For every $10,000 that you see an increase in someone's student loans, that basically reduces their ability to purchase a home by 10 or 15%. Gen Z homebuyers have comparatively lower incomes compared to other home buyers because they are just starting out in their careers. When it comes to the workforce, job security is a major obstacle for this age group, and while young adults are more likely to be employed full-time than young adults three decades ago, those 18 to 24 only saw a 1% gain in their share of full-time workers compared to the same age group that worked full-time in 1993. It wasn't easy; I worked at least 40 hours a week during college just to make it happen. These financial obstacles are impacting Gen Z and driving a wedge between their goal to be homeowners. In 2023, after mortgage rates soared to as much as 8%, the homeownership rate for adult Gen

How Gen Z Is Buying Homes Younger Than Millennials And Boomers Did

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