A January 2025 survey of over 2,000 U.S. renters shows financial barriers are the main obstacles to Gen Z homeownership, including rising mortgage rates, escalating home prices, student loan debt and career instability. Many Gen Z renters also avoid the responsibilities and unpredictable costs of home maintenance and repairs. Upfront costs such as down payments and private mortgage insurance can increase monthly payments and put mortgages out of reach. Most Gen Z renters view leasing as a better financial strategy, with large majorities saying renting allows saving for life experiences, values freedom, and often serves as a short-term necessity.
The biggest obstacles to homeownership for Gen Z are financial. More than half of respondents (57%) said rising mortgage rates are a key factor preventing them from buying a home. About 52% cited escalating home prices, while others pointed to student loan debt and career instability as the main reason a mortgage feels out of reach. Many also expressed reluctance to take on the responsibilities of home maintenance and repairs.
With homeownership blocked for now, most Gen Z renters see leasing as not just a temporary fix, but in many cases, a smarter financial move. Nearly three in four respondents (72%) said they view renting as a better financial strategy than buying. For some, renting still represents a stepping stone. Seventy-five percent said they see leasing as a short-term necessity, but 59% said they value the freedom that comes with renting.
Many can't afford the upfront costs associated with home ownership like down payments for (private mortgage insurance) if they're unable to meet the (loan-to-value ratio) necessary to eliminate the requirement for mortgage insurance, the report explained. This can increase mortgage payments enough to make them unaffordable. Beyond that, many are saddled with a significant amount of student loans and don't feel comfortable taking on additional debt.
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