Is Gen Z Interested in Home Ownership? It Depends Who You Ask

Few Gen Zers view homeownership as “extremely important” compared to Millennials, according to new research from Apartment List.

Some 87% of Gen Z respondents to the survey view homeownership as being at least somewhat important, similar to the rate for millennials. However, just 26% said it’s “extremely” important compared to 35% of young Millennials.

Additionally, 77% of Gen Z view homeownership as being “at least somewhat attainable” within the next 10 years. However, only 13% think that homeownership is “extremely attainable,” significantly lower than the shares for young Millennials (21%) and older Millennials (23%).

When combining views of importance and attainability, Apartment List finds that just 9% of Gen Z view homeownership as both “extremely important” and “extremely attainable.” This is significantly less than the comparable rates for young Millennials (16%) and older Millennials (17%).

Its survey was distributed to adults aged 18-40 between Oct. 14-16, 2021. In total, over 8,000 responses were collected and age- and gender-balanced according to the US Census.

Not Many ‘Actively Working Toward Homeownership’

Despite a generally positive outlook on homeownership, it’s not a goal that many Gen Z renters are actively working toward, according to Apartment List. Just 16% say that it’s currently their top financial priority, well below the shares that are prioritizing personal savings and investments (35%) and paying down debt (27%).

“Home ownership is no longer the best way to build wealth,” Richard Ross, CEO of build-to-rent single-family home company Quinn Residences, on Gen Z and home ownership, tells GlobeSt. “The American Dream of owning a home is still there for some, but has shifted to meet the needs of consumers, which is one reason why build-to-rent housing communities have become increasingly prevalent.”

Furthermore, he said Generation Z has found different ways to build wealth, “especially with the rise of investing in cryptocurrency. It’s now easier to invest in ETFs than it is to buy a house.

“Gen Z also witnessed either their parents or parents’ acquaintances suffer through the housing crisis during the Great Recession, and have realized that building wealth through homeownership is no longer always the best option.”

Homeownership is Correlated to Income, Not Age

On the other hand, Dennis McGill, CFA, Director of Research, Zelman & Associates, a Walker & Dunlop company, tells GlobeSt that asking a 20-something year-old about homeownership seems like a volatile exercise. “Our data shows that homeownership is very highly correlated with income. And owned homes are predominantly single-family homes, which are very highly correlated with being married and having children.

“Because a survey respondent 24 or younger is very early in their career (if at all), is increasingly unlikely to be married and increasingly less likely to have children at this point in their life, it would not surprise me that their sentiment about homeownership (however reliable that could even be at that age) would be different from older cohorts.”

The better question, McGill continued, is how does a 24-year-old respond today versus a 24-year-old 10 or 20 years ago. “And even more, whether a 24-year-old’s response is even predictive of behavior at 34 or 44.”

According to the Census Bureau quarterly HVS, the homeownership rate among households younger than 25 was 25.6% in the most recent quarter, McGill shared. 

“You have to throw out 2020 data because the survey process was hindered by the pandemic,” he said. “Excluding 2020, 2007 is the only other year since 1993 when the third quarter rate was higher than 3Q21.”

McGill said that for most young adult cohorts, homeownership rates are below long-term averages, but they have been climbing since 2016.

“In our opinion, while young adults are getting married later, having children later and therefore seeking single-family/suburban housing later in their lives than earlier generations, when they ultimately reach those life milestones, we see very similar behavior with respect to living choices and homeownership.”