...
By Giulia Carbonaro
Senior Reporter
0
Share
Newsweek is a Trust Project member
See more of our trusted coverage when you search.Prefer Newsweek on Googleto see more of our trusted coverage when you search.
Young Americans' rate of homeownership slowed down in 2024 after years of steady growth, according to a new report by real estate brokerage Redfin.
Just over one-quarter (26.1 percent) of Gen Zers—those born between 1997 and 2012—owned their home in 2024, remaining essentially unchanged from 2023 at 26.3 percent and 2022 at 26.2 percent.
Why It Matters
Years of skyrocketing prices, stubbornly high mortgage rates and low levels of inventory have turned homeownership into an increasingly unreachable dream for many Americans.
Read More on News
The affordability crunch in the housing market weighs more heavily on young people, who have not had the time to accumulate as much wealth or equity as the older generations and are stuck with high price tags and burdensome mortgage payments.
What To Know
Between 2017 and 2022, when Gen Zers started aging into potential homeowners, their rate of homeownership increased each year, according to Redfin, showing that the younger generation had some momentum on the market.
That would make sense: it is fairly normal for people who are thinking about forming their own family and getting married to buy their own homes. However, with the current market conditions, many just cannot afford to.
Mortgage rates, which were relatively low during the pandemic years, started rising rapidly in 2022 as a result of the Federal Reserve's aggressive rate-hiking campaign to combat inflation. At the start of 2022, weekly average rates were around 3 percent; by the end of the year, they were around 7 percent.
By spring 2024, the busiest time of the year for buyers and sellers, the typical U.S. homebuyer was paying roughly $2,800 per month, according to Redfin—an all-time high. Experts expect mortgage rates to linger between 6 percent and 7 percent throughout 2025 and 2026.
Despite growing supply on the market, inventory remains historically low compared to demand, keeping prices up. Older homeowners are holding on to their cheaper mortgage payments, leaving younger generations with fewer options on the market, especially desirable homes in popular neighborhoods.
Faced with crippling housing costs, Gen Zers are changing their attitude about homeownership. Many prefer to continue renting, as the cost of renting has remained essentially flat in recent years; many prefer to travel or live with their family, prioritizing flexibility over stability.
How Do Gen Zers Compare To Older Generations?
While the rate of homeownership flattened for Gen Zers in 2024, it increased for older generations such as Gen X—born between 1965 and 1981—and Baby Boomers—born between 1946 and 1964.
Last year, 72.9 percent of Gen Xers owned their home, up from 72 percent in 2023; and 79.6 percent of boomers owned their home, up from 78.8 percent a year earlier. While these increases are modest, they are considered normal for older generations.
...
Millennials—born between 1981 and 1996—are in a very similar situation to Gen Zers: after growing their rate of homeownership steadily each year since 2012, they faced a standstill in 2024.
More than half (54.9 percent) of millennials owned their home last year, according to Redfin, essentially unchanged from 2023, when it was 54.8 percent.
The younger generations are far behind the older generations when it comes to homeownership rate. In 2024, 32.6 percent of 27-year-old Gen Zers owned their home, compared to 38.4 percent of Gen Xers when they were their age and 40.5 percent of boomers when they were 27.
Fifty-six percent of 35-year-old millennials, who as a generation are reaching crucial life milestones much later than their parents and grandparents—owned their home in 2024, against 59.4 percent of Gen Xers at that same age and 61.5 percent of boomers when they were 35.
What People Are Saying
Redfin Chief Economist Daryl Fairweather said in a statement: "Homeownership is still a symbol of success and stability for many Americans, but the nation's culture is shifting with the economic times."
She added: "Some young people are placing less emphasis on owning their own home because they're prioritizing flexibility, while others continue renting because they can't afford to buy.
"Buying a home is still typically a good financial investment, but for young people who don't have the desire or means to do so, there are other viable investments that, unlike buying a home, don't require a huge down payment. Those people might consider investing in the stock market, their own business, or education."
What's Next
Younger generations are facing a much more difficult path to homeownership than their parents and grandparents. While those who can afford it may decide to buy a home even with the current prices and mortgage rates, most are biding their time.
View 0 Comments
Submit Correction
View Editorial & AI Guidelines