Although 90% of Gen Z want to become homeowners someday, 79% believe they’re priced out of the market, according to a new survey from Clever Offers.
The survey uncovered an alarming level of financial instability among Gen Z that hinders their ability to buy homes. About 46% of Zoomers said they’re already struggling to pay rent, and just under a third said their living situation is so precarious that they’ve considered living in their car.
Those circumstances, coupled with a stubbornly expensive market, have led to widespread pessimism among the younger generation. Two-thirds of Zoomers said they feel more worried about their housing security than they did a year ago, and 82% worry the market will get worse before they’re able to buy a home.
What’s more, over 1 in 5 Zoomers said the start of World War III seems more likely than owning a home in the next five years.
Clinging to the American Dream
Gen Z has a reputation for being unconventional, but an overwhelming majority aspire to own a home. Ninety percent of Zoomers said they wanted to buy a house, but 62% worry they never will. Of those who think they’ll never own a home, 82% say it’s because they won’t be able to afford it. That’s a sharp increase from 2024, when only 57% of respondents said the same.
To some extent, their pessimism is justified. Home prices and mortgage rates have remained elevated despite efforts to cool down the market. Wages have stagnated, and inflation has persisted. Yet to many zoomers, the market may feel worse than it is.
About 11% of Zoomers say getting struck by lightning, a 1 in 15,300 chance, feels more likely than owning a home in the next five years. Meanwhile, 17% say the same about winning the lottery — a 1 in 300 million chance.
Aiming Low
Nearly every Zoomer said they face barriers to homeownership. The most-cited barrier was high prices, with 47% of Gen Z saying they impeded their ability to buy homes. About 28% said interest rates were too high, and another 28% said they found it too difficult to save for a down payment.
This was a common sticking point among Gen Z. Roughly 75% said the rising living costs have made it impossible to save money for a down payment. Almost half of Zoomers said they planned to put down less than 20% on a future home purchase, while 22% said they’d have to put down less than 10%.
Facing economic headwinds, many prospective Gen Z homebuyers have adjusted their expectations downward. Sixty percent of Gen Z said they’d make an offer on a fixer-upper that needs significant repairs. Fifty-eight percent would buy a home with no central heat or air conditioning, 47% would buy a home with asbestos, 46% would buy a home with foundation issues, and 46% would buy a house with a leaky roof.
Affordable Homes Still Out of Reach
Fifty-five percent of Gen Z said they want to purchase a home that costs less than $300,000, while 28% aim to buy a home that costs less than $150,000 — far below the median U.S. home price of $416,900.
Even at that more affordable price point, homeownership may still be out of reach for many Zoomers. Seventy-nine percent couldn’t afford a 10% down payment on a $300,000 house, and 67% couldn’t afford a 10% down payment on a $150,000 home. What’s more, over a quarter of Zoomers said their current finances prevent them from putting any money toward a down payment.
As a consequence, many zoomers assume they’ll be forced to delay becoming a first-time homebuyer until they’re older. More than half of Gen Z said they’ll be at least 30 or older when they buy their first home, a significant increase from 2024, when only 39% of Zoomers said the same.
Facing steep barriers to homeownership, many zoomers wonder if they’ll have to opt out of homeownership. Sixty-six percent said the housing market is rigged against them, and 72% believe they’ll be forced to rent forever.
Forty-one percent said they’d rather avoid home-buying altogether and live rent-free with their parents forever.
The Grass Isn’t Always Greener
Of course, some zoomers have managed to buy homes. Many of them got financial help from their parents. Twenty-eight percent of Gen Z homeowners said their parents helped with their down payment, and 19% said their parents bought their home for them.
However, the reality of homeownership isn’t as rosy as many Zoomers assumed. About 23% said their financial situation has gotten worse since buying a home, 17% said their overall stress levels have increased, and 29% said they’ve struggled to pay their mortgage.
It’s no wonder that more than two-thirds of Gen Z homeowners have regrets about their purchase, with the most common being rushing to buy a home.
Many problems could have been avoided with the guidance of a good real estate agent. Still, generational differences can make it tough for Gen Z buyers to find a real estate agent they like, said California-based agent Cindi Hagley.
“There seems to be a big disconnect between Gen Z buyers and realtors,” Hagley said. “The real estate industry as a whole is aging, and many agents have not grasped technology — and Gen Z buyers are all about technology.”
Gen Z buyers may also have habits that agents find off-putting.
“Yes, they will often have their heads buried in their devices when you speak with them, but this does not mean they aren’t listening,” Hagley said. “They are very in tune and are evaluating you, especially in the beginning. If you are the type of agent who prioritizes sales and tends to push any residence, they will not work with you. My experience shows they like a straightforward approach.”
If younger agents enter the market, Zoomers may face a less challenging buying process. Until then, agent compatibility is just one more obstacle Gen Z buyers face.