Generation Z is quickly superseding millennials as the coming-of-age consumer group. However, as they reach young adulthood, this cohort — born between 1997 and 2012 — is beginning to confront a daunting fact: Their dream of homeownership might be tough to turn into reality anytime soon.

Key Gen Z homebuyer statistics

  • Gen Z makes up 4% of all homebuyers, according to the National Association of Realtors (NAR).
  • 63% of Gen Z respondents to Bankrate’s Financial Security Survey associated owning a home with the American Dream — less than the overall 73%.
  • Gen Z homebuyers purchase the smallest homes across buyers: a median 1,480 square feet, according to NAR.
  • Just 31% of Gen Z homeowners have no regrets about their home purchase, according to the Bankrate survey.
  • 13% of Gen Z respondents to a separate Financial Freedom Survey by Bankrate don’t feel financially secure, and likely won’t ever feel that way.

What are the barriers for Gen Z homebuyers?

First came the inventory shortages and skyrocketing home prices. Then came inflation. As of August 2023, the median national home price was just over $405,000, according to the National Association of Realtors. Three years ago at that time, that figure was roughly $310,000.

Financing was less expensive then, too: The interest rate on a 30-year fixed-rate mortgage averaged 3.38 percent, compared to the current 7.8 percent, according to Bankrate data.

Major obstacles

  • Down payment: Forty percent of non-homeowners in Bankrate’s Financial Security Survey reported an inability to save for a down payment and closing costs. Even with just 3 percent down at the current median price, a Gen Z borrower would need to sock away more than $12,000 — and more, on top of that, for closing costs, moving expenses and home repairs.
  • Inflation: As Gen Z earns entry-level salaries, they’re grappling with heftier costs thanks to inflation, which has touched everything from groceries to gas and rent. Inflation remained elevated as of August 2023, and some analysts expect it to stay that way into 2024, according to Bankrate’s second quarter 2023 Economic Indicator Poll.
  • Student loan debt: Countless studies have shown both millennials and Gen Z have delayed life moves such as buying a home due to student loan debt. College debt not only prevents renters from saving meaningfully for a down payment; it also factors into a mortgage borrower’s debt-to-income (DTI) ratio, which directly impacts how much can be borrowed and at what rate.
  • Job insecurity: Much of Gen Z are starting or still finding their footing in their careers. While they’re job-hopping, relocating and seeking out raises, 36 percent still feel worried about job security, according to Bankrate’s Job Seekers Survey. This sense of instability could influence their desire or ability to buy a home.

What is Gen Z’s approach to homebuying?

While many members of Gen Z view homeownership as an essential piece of the American Dream, that sentiment is less ingrained in this generation compared to others.

As Gen Z copes with lower earnings, costlier goods and student loan debt, many have opted to stop renting and live with family in order to boost their savings. Thirty percent of Gen Z homebuyers move directly from their family member’s home to a home of their own, according to NAR.

A substantial portion of this generation — 53 percent — are also working a side hustle to help with earnings and savings, according to Bankrate’s Side Hustle Survey.

Not surprisingly, Gen Z homebuyers are most active in markets where home prices are still relatively affordable: Virginia Beach, Cincinnati, Detroit, St. Louis and Indianapolis, according to an April 2023 report from Redfin. Across these cities, the median home price for Gen Z buyers came in at $255,000 or less.

Tips for Gen Z homebuyers

Keeping a low debt-to-income ratio can help put you in line for lenders’ best rates, as can maintaining a strong credit score with a history of on-time payments. — Sarah Foster, Bankrate Economic Analyst

1. Consider your debt load

If you’re carrying credit card or student loan debt (or both), you might be hesitant to take on more with a mortgage. Forty-seven percent of Americans indicate that debt has a negative impact on their mental health, according to Bankrate’s Financial Wellness Survey.

Despite headlines pushing a sense of urgency, there’s nothing wrong with sitting tight. For some, tackling debt first might be the better course.

“Keeping a low debt-to-income ratio can help put you in line for lenders’ best rates, as can maintaining a strong credit score with a history of on-time payments,” says Sarah Foster, principal U.S. economy reporter for Bankrate. “If you decide it’s best for your personal goals and finances to wait out the market a little bit more, concentrate on paying down your debt and saving for a down payment.”

2. Get clear on your goals

A home is a major investment, so think carefully about where you want to live and what type of property you want — and be prepared to stay there for some time. If you didn’t make enough of a down payment to start and haven’t built much equity through appreciation, it’ll be harder to break even or profit when you sell.

“Housing can be a great investment to help you build your wealth, but you often have to stomach downturns in the market that can impact how much your property appreciates,” says Foster. “That often means holding onto your home for at least five to 10 years.”

3. Widen your home search

With a tight budget, flexibility is key. Instead of looking for a single-family home with a backyard in a sought-after neighborhood, for example, expand your house hunt to other options or farther-flung areas.

“Maybe explore other local townships that may have more affordable pricing, or consider condos and townhomes to start,” says Judy Chin, a Realtor with RE/MAX Villa in New Jersey.

If you find you’re unable to meet your wish list within your budget, some level of sacrifice might be in order. Twenty-nine percent of Gen Z and millennial respondents to Bankrate’s Financial Security Survey indicated they’d move out of state or purchase a fixer-upper to buy a more affordable home; 27 percent said they’d downsize or take on roommates.

4. Look for help

The downside to being a younger homebuyer: You might not be earning that much money yet, or have much of a credit history.

However, that can actually help you qualify for down payment assistance.

“State and local programs can provide great financial help for first-time homebuyers to help with down payments, closing costs or other costs associated with a home purchase,” says Pete Boomer, executive vice president at PNC Bank.

Check out Bankrate’s list of first-time buyer programs by state to learn your options.


  • Generation Z is the generation that follows millennials and precedes Generation Alpha. Born between 1997 (or 1996, or 1999, depending on who you ask) and 2012, the members of Gen Z are digital natives accustomed to always having access to the internet and a smartphone.
  • Affordability is a challenge for Gen Z homebuyers, but it’s also a challenge for millennials and buyers of other generations. The Gen Zers now in early adulthood have had less time to accumulate savings than previous generations, which could make it more difficult to become a homeowner in the short term.
  • Buying a home involves considerable financial preparation, including saving for a down payment and closing costs; paying down debt and taking other steps to improve or maintain your credit score; and determining your budget. When it’s time to buy, the process includes connecting with a mortgage lender and working with a real estate agent to find appropriate homes and make offers.