The common milestones of the American dream once came in rapid succession. Couples would get married, buy a home, and have kids. But low inventory, skyrocketing mortgage rates, and stagnating wage growth have scrambled those milestones for some.
“Gen Zers are absolutely crushing it when we think about singles purchasing homes in this housing market compared to millennials at the same age,” Jessica Lautz, deputy chief economist and vice president of research at NAR, told Fortune.
The giant to be sure accompanying this data point is that, as many Gen Zers aim to make homebuying a reality, they still make up a small share of the housing market. The generation accounted for just 4% of all buyers. And the report also found first-time homebuyers composed the smallest share ever recorded since NAR started collecting data in 1981. First-time buyers comprise just about one in five, or 21%, of homebuyers, down from 24% last year.
For those Gen Zers who have scored a pair of keys, many are taking nontraditional routes to a down payment. About 14% of homebuyers 18 to 26 have consulted a community or government down payment assistance program (DPAP). These financial aid initiatives are usually provided by state or local governments, nonprofits, or lenders and are designed to cover the upfront costs of purchasing a home, helping low-income buyers get a foothold in the housing market. For comparison, the next-highest generation to consult a DPAP for support was young millennials, ages 27 to 35, just 4% of whom used that financial lever.
About 13% of Gen Zers have received gifts from relatives or friends. That’s less than young millennials, nearly a quarter of whom received gifts, and 13% of older millennials, 36- to 45-year-olds, did too. About one-fifth of Gen Z homebuyers used the proceeds from the sale of a primary residence.
Whatever the journey, Lautz said the varied paths to homeownership point to the resilient belief in homebuying as a core tenet of the American dream. “I am encouraged that we are seeing them move into homeownership,” she said. “I do think it speaks to the strength of homeownership being part of the American dream.”
