The American Dream of homeownership is seeming less and less likely amid current economic conditions and high interest rates. That’s what the latest survey results from Redfin found, with 18 percent of millennials and 12 percent of Gen Zers who replied to a recent housing survey believe they will never own a home. The survey was fielded to 5,079 U.S. residents who either moved in the last year, plan to move in the next year, or rent their home.
The report focuses on the 1,340 Gen Z (aged 18-26) and 1,973 millennial (aged 27-42) respondents. The stat above is based on the following question: Do you believe that you will ever own your own home in the future? Respondents could choose “yes” or “no.”
“The worsening housing affordability crisis has an outsized impact on Gen Zers and millennials because they’re much less likely to own a home than older generations,” said Redfin Chief Economist Daryl Fairweather. “That means many young Americans don’t benefit from rising home prices by gaining equity. Instead, these would-be first-time homebuyers bear the burden of high prices, high down payments and high monthly mortgage payments, without profits from a previous home to offset the cost. Many young people don’t have a choice between renting and buying. They’re renting their home because even though rent payments have increased, too, it’s still more affordable than buying in much of the country–and renters don’t need a down payment.”
Roughly half of Gen Z and millennial renters who believe they’re unlikely to purchase a home in the near future say the high price of homes on the market is blocking them from buying. Some 46 percent of millennials and one-third 33 percent of Gen Zers say their lack of ability to save for a down payment is a barrier.
Roughly one-third also say they’re unable to afford monthly mortgage payments. About one in five Gen Zers and 16 percent of millennials say they need to pay off their student loan debt before they’re able to buy a home.
Of the young Americans who are planning to buy a home in the next year, about two of every five Gen Zers and millennials say they’ll work a second job to help fund their down payment.