Redfin Reports Gen Z’s Homeownership Rate Stagnated in 2023, But Millennials and Gen X Saw Gains
January 17 2024 - 8:00AM
Business Wire
Still, most adult Gen Zers are tracking ahead
of where their parents were at the same age, likely because many
Gen Z homeowners were able to buy when rates were near record
lows.
(NASDAQ: RDFN) — Just over one-quarter (26.3%) of adult Gen Zers
owned a home in 2023, little changed from 26.2% in 2022, according
to a new report from Redfin (redfin.com), the technology-powered
real estate brokerage. Meanwhile, the homeownership rate for
millennials rose to 54.8% from 52%, and the homeownership rate for
Gen X rose to 72% from 70.5%.
The rate for baby boomers was little changed (78.8% vs 78.7% in
2022), down from a record 79.7% in 2020, as some boomers have
passed away or moved into retirement homes.
The homeownership rate for adult Gen Zers likely moved sideways
in 2023 because it was an especially hard 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. While that posed challenges for house hunters
across generations, it was particularly difficult for America’s
youngest homebuyers, many of whom are just starting their careers
and don’t have significant savings or wealth from the sale of a
previous home.
The good news is that 2024 is shaping up to be a more affordable
year for homebuying than 2023. Mortgage rates have dropped from
over 8% in October to 6.8% as of mid January, pushing homebuyers’
monthly payments down more than $300 from their 2022 record high.
The drop in rates is bringing both buyers and sellers off the
sidelines. And an increase in sellers has fueled a jump in new
listings, which is giving buyers more options to choose from and
could ultimately put downward pressure on prices.
“Housing affordability remains strained, but things are looking
up for Gen Z,” said Redfin Chief Economist Daryl Fairweather. “The
recent decline in rents means Gen Zers can put more money toward
saving for a down payment. 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.”
Most Adult Gen Zers Are Tracking Ahead of Where Their Parents
Were at the Same Age
While the homeownership rate for adult Gen Zers has stagnated, a
majority of them are still outpacing young people of the past.
The homeownership rates for 19-to-25-year-old 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.
America’s youngest homebuyers are also financially savvy, which
makes the process easier, said Jon Byram, a Redfin Premier real
estate agent in Northern Virginia.
“Gen Zers have done their research. They know all of the real
estate jargon and are entering the housing market more educated
than prior generations,” he said. “Some young first-time buyers are
also coming in with financial help from family, or co-buying with
family members, which boosts their buying power. And some have
savings because they’ve been living with their family rent
free.”
Byram continued: “My youngest buyers handled the pandemic
homebuying frenzy the best. Some older buyers had trouble grappling
with the significant changes that had occurred in the market since
the last time they purchased a house.”
The only Gen Zers who are tracking behind prior generations are
26-year-olds, who were the oldest Gen Zers as of 2023. The
homeownership rate for 26-year-old Gen Zers is 30%, below 31% for
millennials at 26, 32.5% of Gen Xers at 26, and 35.6% of boomers at
26.
To view the full report, including charts and methodology,
please visit:
https://www.redfin.com/news/homeownership-rate-by-generation-2023
About Redfin
Redfin (www.redfin.com) is a technology-powered real estate
company. We help people find a place to live with brokerage,
rentals, lending, title insurance, and renovations services. We
also run the country's #1 real estate brokerage site. Our
home-buying customers see homes first with same day tours, and our
lending and title services help them close quickly. Customers
selling a home in certain markets can have our renovations crew fix
up their home to sell for top dollar. Our rentals business empowers
millions nationwide to find apartments and houses for rent.
Customers who buy and sell with Redfin pay a 1% listing fee,
subject to minimums, less than half of what brokerages commonly
charge. Since launching in 2006, we've saved customers more than
$1.5 billion in commissions. We serve more than 100 markets across
the U.S. and Canada and employ over 4,000 people.
For more information or to contact a local Redfin real estate
agent, visit www.redfin.com. To learn about housing market trends
and download data, visit the Redfin Data Center. To be added to
Redfin's press release distribution list, email press@redfin.com.
To view Redfin's press center, click here.
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version on businesswire.com: https://www.businesswire.com/news/home/20240117460175/en/
Redfin Journalist Services: Ally Braun 206-588-6863
press@redfin.com
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