Gen Z Is Saving More Than Millennials—But Can They Afford a Home?

Generation Z, born between 1997 and 2012, is quickly making its mark in the housing market. According to recent surveys, nearly half of Gen Zers aim to buy a home within the next five years. Despite their ambitious goals, homeownership remains out of reach for many.

Surprisingly, Gen Z has been saving at a higher rate than previous generations. But with rising home prices and high mortgage rates, is their savings enough for a down payment?

Gen Z’s Impressive Saving Habits

A recent study by Talker Research reveals that Gen Z is more disciplined about saving than older generations.

- 21% save between 1% and 10% of their income each month.
- 25% put away between 11% and 20%.
- 12% save around 21% to 30% of their earnings.
- 5% save their entire paycheck.

Compared to millennials, Gen Z appears to be more financially cautious. While 30% of millennials save up to 10% of their income, a concerning 26% save nothing at all. In contrast, only 16% of Gen Zers don’t save.

With many still living with family, Gen Z has had the opportunity to save aggressively. Yet, despite their strong financial habits, their presence in the real estate market remains minimal.

Why Isn’t Gen Z Buying Homes?

The National Association of Realtors (NAR) reports that Gen Z buyers aged 18 to 24 make up just 3% of home buyers. Their relatively low household income, averaging around $45,000 per year, makes saving for a down payment and affording mortgage payments a challenge.

Another key hurdle? High homeownership costs relative to income. In the 200 largest metro areas, Gen Z buyers spend an average of 37% of their income on mortgage payments—significantly more than the 26% spent by the typical homebuyer.

Additionally, rising home prices and high mortgage rates have forced many young buyers to reconsider their timelines. Side hustles and multiple income streams have become essential, with 5.3% of U.S. workers juggling multiple jobs—the highest rate since 2019.

Where Gen Z Is Buying Homes

While coastal cities remain out of reach, Gen Z homebuyers are making moves in more affordable Midwestern markets. Cities like Akron, OH, have become hotspots for first-time buyers seeking lower-priced homes.

Recent data from CoreLogic shows that in 2024, 13% of U.S. home purchase applications came from Gen Z buyers, a 3% increase from the previous year. Interestingly, nearly 45% of these applications included co-buyers, such as friends or family members, demonstrating Gen Z’s willingness to get creative in achieving homeownership.

How Much Do You Need for a Down Payment in 2025?

Many believe a 20% down payment is necessary for homeownership, but that’s not always the case.

- The average down payment for first-time buyers is around 9%, according to NAR.
- With the national median home price at $400,500, a 9% down payment amounts to $36,045.
- At a 6.95% interest rate, a 30-year fixed mortgage with an 8% down payment results in a $2,413 monthly payment (excluding taxes and insurance).
- Meanwhile, the national median rent was significantly lower at $1,695 per month in late 2024, making renting the more affordable option for many.

Is Gen Z Stuck Renting Forever?

Gen Z is currently the only generation increasing its share of renter households. Many feel homeownership is unattainable, with 13% believing they will never be able to afford a home. Nearly half rank housing costs as their top financial stressor.

Despite these challenges, Gen Zers are finding innovative ways to buy homes. Some are co-purchasing properties with friends, using house-hacking strategies, or relocating to more affordable cities to turn their homeownership dreams into reality.

While buying a home may not be easy, Gen Z’s strong financial habits and creative problem-solving may ultimately help them break into the real estate market in the years to come.