Gen Z Can't Afford to Become Homeowners in Major Cities as Property Prices Continue to Surge

Gen Z Can't Afford to Become Homeowners in Major Cities as Property Prices Continue to Surge
Cover Image Source: Photo by Alena Darmel | Pexels

For older generations owning a home used to be just another step forward on the path to having a successful life and financial stability. As times changed, it became a dream for most millennials, since they were less likely to buy a home in their 30s, as compared to boomers. Things have only become even harder for Gen Z, as most of them are starting off with their careers. A significant portion of these young professionals are yet to become homeowners, and census data indicates that only 17% of Gen Z adults currently own any kind of real estate. This trend can be attributed to various factors, including a desire for location independence, and a preference for saving money, but more than all of that, financial constraints prevent them from affording a home.



 

Also Read: Woman Hits Jackpot Worth Half a Million; Credits Tarot Card Prediction for Her Win

 

In areas where home prices are high and mortgage rates are steep, affordability becomes a major obstacle to homeownership for this demographic. "Non-homeowners cite insufficient income, high home prices, and not being able to afford a down payment or closing costs as the most common barriers to becoming a homeowner," Bankrate's chief financial analyst, Greg McBride, said.

In Fremont, California, for example, the home price-to-income ratio is a staggering 22.8, making homeownership close to impossible for these individuals. Similarly, in San Diego, the ratio stands at the same level, while in Lexington, Kentucky, the ratio is comparatively lower at 11.4.

Image Source: Photo by Roberto Vivancos | Pexels
Image Source: Photo by Roberto Vivancos | Pexels

 

Other factors such as a high proportion of homes selling above listing price and a relatively low homeownership rate for Gen Z also contribute to the challenge of purchasing a home. San Jose and Riverside in California present formidable obstacles to homeownership, with high home price-to-income ratios and other unfavorable market conditions.

Also Read: Man Accuses Employer of Making up Reasons to Fire Him Ahead of Bonus Payout; Internet Reacts

"High and rising home prices can contribute to the feelings of not having enough income or savings accumulated to buy a house," stated McBride.

In bustling cities like New York City, the dream of homeownership remains a distant reality for many. The city's soaring housing prices, exemplified by Manhattan's staggering median sale price of $1,125,000, pose a significant barrier to entry for young homebuyers.

Also Read: Manager Asks Woman With Stage 4 Cancer to Return to Work; Triggers Online Outrage

Queens and Staten Island, however, offer a middle ground in terms of housing metrics, with Staten Island particularly noteworthy for its relatively high share of Gen Z homeownership, surpassing 26%. 

Gen Z laughing with a phone | Pexels | Anna Shvets
Image Source: Pexels | Photo by Anna Shvets

 

Despite their desire for homeownership, the combination of soaring home prices, limited inventory, and challenging economic conditions makes it extremely difficult for Gen Z to achieve this milestone. As a result, many individuals may find themselves renting or living with family for an extended period.

A recent survey unveiled that a remarkable 68% of Gen Z adults are choosing to live with their families, alongside 20% of millennials, who are also continuing to reside in their family homes. This inclination towards multigenerational living arrangements represents a significant demographic shift, with an estimated 51 million individuals currently living in such households.

The survey further indicates that over 40% of both millennials and Gen Zers feel that they will be sticking to such living arrangements for at least two years to come.

More from MARKETREALIST

As Inflation Affects Prices of Meals, Woman Compares Chains Serving Chicken Wings in Viral Video

Recruiter Explains Why It’s So Hard to Bag a Job Right Now—the Labor Market Is Cooling

Share this article:  Gen Z Can't Afford to Become Homeowners in Major Cities as Property Prices Continue to Surge