Millennials and Gen Z Put Off Homeownership Plans as Affordability Worsens

Nearly two years into the COVID-19 pandemic, 40% of Millennials and Gen Z are postponing their homebuying plans as a result of decreased affordability across the nation. In a 2018 survey conducted by PropertyShark, 83% of Gen Z respondents expressed a plan to enter homeownership within the next five years, but nearly four years later, only 29% have reached their goals.

Despite reporting dissatisfaction with homebuying and homeownership, younger generations are finding new living alternatives to adapt to an affordability crisis and post-pandemic life. Nearly one-quarter of PropertyShark respondents live in shared households with friends or roommates, and about two-thirds of Millennial and Gen Z homeowners declared a plan to relocate to accommodate lifestyle changes. New migration patterns are boosting the popularity of states like Colorado and Florida, where younger generations are attracted to warmer climates and active social scenes.

Three years ago, we explored the differences between generations in housing preferences and readiness for homeownership. At the time, we found that Gen Z was enthusiastic about the prospect of owning a home, whereas Millennials were pessimistic about their homeownership outlook.

Today, Millennials are still pessimistic about the possibility of homeownership, and Gen Z’s dreams have also been dampened. At the same time, suburban living has risen in popularity — even among city-minded Millennials — and Colorado has become the fourth-most popular dream destination to live in. This comes even as all generations are feeling the ever-increasing pressure of affordability, to save enough for a down payment or achieve the financial independence to rent.

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