Are Millennials And Gen Z Losing Their Homebuying Momentum?

Young Americans seemed to be on track to overcome all obstacles and achieve the American Dream of homeownership, but now they’re losing their momentum.

That’s according to a new report from Redfin, which found that Gen Z and Millennial homeownership rates were essentially unchanged from 2023 to 2024.

Just about a quarter of Gen Zers owned their home in 2024 (26.1%), essentially flat from 2023 (26.3%) and 2022 (26.2%). Before that, Zoomer homeownership rates had risen almost every year since 2017.

Millennials fared similarly, with 54.9% owning a house in 2024, about the same as in 2023 (54.8%). That figure had risen every year since 2012.

These generations are also falling behind their parents’ generations. While 33% of 27-year-olds own a home today, 40% of Baby Boomers did at the same age.

Young buyers face more challenges than their parents when it comes to purchasing a home. Price appreciation is at historic highs, and mortgage rates have settled between 6% and 7%, making the lending landscape tough for first-timers.

Average wages and housing costs are increasing at different levels as well, meaning potential buyers need to save more despite receiving essentially the same paycheck as they did a decade ago.

“Homeownership is still a symbol of success and stability for many Americans, but the nation’s culture is shifting with the economic times,” Redfin Chief Economist Daryl Fairweather commented.

Fairweather noted that in addition to not being able to afford a house, changing lifestyle trends mean that some young people are prioritizing other means of growing wealth.

“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,” Fairweather said.