Homeownership has always been deeply ingrained in the American Dream, providing people with stability and an opportunity for savings. Although it is expected that younger generations would start seeing an increase in homeownership as they grow to prime homebuying age—when they get married, start families, and have stable incomes—this is not the case. Fewer millennials and Gen Zers are buying homes, opting instead for more affordable alternatives.
The Decline
Millennial and Gen Z homeownership rates stagnated in 2024, according to Redfin. Only 26.1% of adult Gen Zers (19-27 year old) owned a home in 2024, not straying far from 26.3% in 2023 and 26.2% in 2022. This marks the third year since homeownership has not increased, as it used to each year since 2017, when Gen Z became viable homeowners. Millennials have seen similar numbers: 54.9% of millennials owned a home in 2024, remaining unchanged from 54.8% in 2023.
Comparing these numbers to homeownership rates of older generations reveals just how much of a decrease Gen Z has seen. For example, 32.6% of 27-year-old Gen Zers owned a home in 2024, which is significantly less than 38.4% of Gen Xers and 40.5% of baby boomers at the same age of 27.
In their 2024 Profile of Home Buyers and Sellers, the National Association of Realtors found that the median age of first-time buyers in 2024 was 38 years old, increasing from 35 in 2023. From 1981 (when NAR first began collecting data) to 2021, the median age of first-time buyers fell within the early 30s range. Starting in 2022 at 36 years old, the median age has jumped to the mid to late 30s.
Additionally, first-time buyers accounted for only 24% of the market share in 2024, decreasing from 32% in 2023. This marks a new record low since 1981—previous low years were 2022 with 26% and 30% in 1987.
The Reasons
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Increased house costs: Since 2022, the median home price calculated at each quarter has consistently been over $400,000, with many closer to $420,000. The median-priced home in 2025—$459,826—is too high for nearly 75% of Americans. More importantly, wages have not increased at the same rate, leaving most Americans completely priced out of homeownership.
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Higher mortgage rates: According to the Federal Reserve, the current 30-year fixed rate mortgage rate in the U.S. stands at 6.83%. Mortgage rates have stayed above 6% since 2022—significantly higher than in recent years, which saw rates ranging from 2.9 to 4.9%.
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Student loan debt: A 2025 report by the Education Data Initiative found that “since 2005, homeownership among recent college graduates has declined by 1.8% for every $1,000 of their student loan debt.” Additionally, those with student loans over $35,000 are 27% less likely to be homeowners.
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Decreasing rental prices: Although prices are still higher than before the pandemic, the average rent price in the U.S. has been falling for over a year (with the exception of New York City), making renting a more attractive housing option than expensive homes.
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Housing shortage: Bankrate writes that the “U.S. has failed to keep up with the housing demands of a continually increasing population,” with various experts estimating a housing deficit of around 4 to 7 million homes.
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Turbulent economy: While it has not been long enough to fully determine how the Trump administration’s economic decisions will impact homeownership rates, it is notable that tariffs have already influenced 23% of Americans aged 18-34 to avoid making major purchases like a home.
Alternatives
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Co-living: Many younger people who still want to reap the benefits of homeownership split mortgage costs and live together with friends and roommates, renting their own units and sharing communal spaces.
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House hacking: Another option for those who still want to own a home is to purchase their own property, live in part of it, and rent out another area to afford high mortgage payments.
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Living at home: According to Ballard Brief, nearly half of 18 to 29-year-olds are now living with their family in their parents’ home, the highest number since the Great Depression.
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Renting: Cheaper rent prices make it more appealing for renters to continue renting, rather than trying their hand at the increasingly higher home prices.
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Different types of housing: Some younger people, particularly those without their own families, are even trying alternatives like tiny homes or vans.
Freebies
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Free Out of State Investing Training: https://www.outofstatemoney.com/
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8 Steps to Buying Out of State: https://www.outofstatemoney.com/long-distance-investing-guide
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The Remote Landlord’s Toolkit: https://www.outofstatemoney.com/remotelandlordtoolkit
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The Creative Financing Playbook: https://www.outofstatemoney.com/creativefinancingplaybook