There are 68 million Gen Zers in America, born between 1997 and 2012, and nearly half of them want to buy a home by 2029, according to a Realtor.com® survey.
Until then, more than half of this generation still lives with family, which could account for how Generation Z has been able to save more money than any other generation, according to a new study.
But if they have an abundance of cash, how is it they’re still not homeowners?
Gen Z saved more money than any other generation
According to Talker Research, 21% of Generation Z sets aside between 1% and 10% of their income each month, while 25% save between 11% and 20%.
Additionally, 12% of Gen Zers manage to save around 21% to 30% of their monthly earnings, and 5% save their entire paycheck.
Their savings outpaces how much the other generations save, including boomers (born between 1946 and 1964), Gen X (born between 1965 and 1980), and millennials (born between 1981 and 1996).
Among millennials, 30% put aside up to 10% of their paycheck, while 24% save between 11% and 20%. But 26% of millennials don’t save anything each month, compared with 16% of Gen Z.
Meanwhile, 32% of boomers admit they save nothing, which aligns with a recent report from Charles Schwab revealing that 45% of boomers said they wanted to “enjoy my money for myself while I’m still alive.”
Gen Zers have the money—so why aren’t they spending it?
Why isn’t Gen Z buying homes?
The share of Gen Z buyers and sellers aged 18 to 24 made up just 3% of buyers and 2% of sellers, according to the most recent National Association of Realtors® Home Buyers and Sellers Generational Trends Report.
Gen Z is entering homeownership with the lowest household incomes, NAR reports, which aligns with Gen Z’s entry-level income status.
Gen Z’s average annual income is $45,000. Members of Gen Z are unlikely to be married and unlikely to have children under the age of 18 in their home.
Another key point from NAR’s findings is that Gen Z buyers tend to have a higher average homeownership cost relative to their income compared with the typical buyer. This underscores the financial challenges they face in securing a home.
For example, in the 200 largest metro areas, Gen Z buyers allocate 37% of their income toward their mortgage, while the average buyer spends only 26%. This means Gen Z buyers have to stretch their budgets further to afford homeownership.
Plus, the job market and economy are tough right now, making side hustles increasingly essential. By the end of last year, 5.3% of U.S. workers were juggling multiple jobs, the highest rate since 2019.
Where (and how) Gen Zers are buying
According to CoreLogic, Gen Zers are making up a larger share of homebuyers in more affordable Midwestern regions, while their presence is smaller in pricier coastal markets.
Akron, OH, is one of the Midwestern cities attracting Gen Z, according to real estate agent Ali Whitley, of Re/Max Crossroads.
“Gen Z are becoming first-time homebuyers here,” she says. “It’s a great time to buy in a great area for an affordable price.”
In 2024, 13% of home purchase applications in the U.S. came from Gen Z, marking a 3-point rise from the previous year.
Although many Gen Z homebuyers are purchasing solo, around 45% of the applications included co-applicants, such as friends in shared living situations or parents offering their support.
How much is needed for a down payment in 2025?
Generally, it is believed that conventional loans warrant 20% down—but that’s not always the case.
“Lately, I am seeing down payments be closer to 5% to 10% and sometimes even lower for first-time homebuyers,” says Denise Supplee, a real estate agent and co-founder of SparkRental in Doylestown, PA.
According to data from the NAR, the average down payment for first-time home buyers is just 9%.
The national median list price in January was $400,500, according to Realtor.com research.
Using the Realtor.com mortgage calculator, a 9% down payment would come to $36,045.
Freddie Mac’s Jan. 30 report put the weekly 30-year fixed mortgage rate average at 6.95%.
Purchasing a $400,500 home with a 30-year fixed mortgage at a 6.95% interest rate and an 8% down payment would result in a monthly payment of $2,413, excluding taxes and insurance.
Meanwhile, the national median asking rent in December 2024 was $718 less than that, clocking in at $1,695 per month—which is why most young people are renting rather than owning.
Will Gen Z be forced to rent forever?
Gen Z is now the only generation that’s currently adding renter households, according to the Joint Center for Housing Studies of Harvard University.
Gen Z is also entering the real estate market at a particularly challenging time, when interest rates are high, housing inventory is low, and home prices are rising.
In a recent Insurify poll, 13% of Gen Zers who want to own a home believe they will never be able to afford it.
Nearly half of Gen Z rank housing as their most stressful expense, and 23% of Gen Zers said they feel unable to plan their future because they’re not sure what their finances will look like.
However, many Gen Zers are getting creative and exploring alternatives like co-owning homes with friends, house hacking, and relocating to more affordable cities to turn their homeownership dreams into reality.
