Generation Z Faces 24% Market Share Drop in Homeownership

The American Dream of homeownership is becoming increasingly elusive for Generation Z, as the number of first-time home buyers reached an all-time low of 1.14 million last year. This figure represents only 24% of the market share, a significant drop from 32% in 2023. The median age of first-time home buyers has also risen to 38 years old, indicating the growing challenges faced by younger generations in entering the housing market.

Millennials, now in their late 30s, are becoming the new face of homeownership. However, Generation Z, burdened with high unemployment rates and substantial debt, may have to wait even longer to achieve this milestone. The economic and market challenges faced by Gen Z, including high mortgage rates and limited housing inventory, are making it difficult for them to afford a home. Additionally, the job market is tougher for Gen Z, with around 58% of recent graduates still looking for their first job, compared to just 25% of previous graduates. Those who do find employment often earn less and carry significant debt, further complicating their path to homeownership.

Baby boomers, who currently represent about 42% of all homebuyers, are dominating the U.S. housing market. They are not only buying homes to live in during retirement but also purchasing multiple properties at a higher rate than their younger counterparts. This trend is exacerbating the housing shortage, as the U.S. market was short 4.9 million housing units in 2023. With only 1.45 million new homes completed that year, the competition for available housing is intense.

Despite these challenges, there is hope for Generation Z. According to analysts' forecasts, Gen Z could become the richest generation in the next 20 years, with their wealth expected to reach $36 trillion by 2030 and $74 trillion by 2040. However, this wealth will come later in life, as they will be in their 50s when they achieve this financial milestone, unlike the baby boomers who bought their first homes in their 20s. The American Dream of homeownership may be delayed for Gen Z, but it is not entirely out of reach.