A great little article from our friends over at Citizens Bank. Millennials are still the largest homebuying generation in the U.S.,1 but another demographic looks poised to overtake them: Generation Z. Although Gen Z (those born between 1997 and 2012) made up just 3% of sellers in 2023, the homeownership rate for this unique demographic is higher than those for Millennials and Gen Xers when they were the same age.2 Last year, the homeownership rate among 24-year-old Gen Zers was 27.8%. When Millennials were 24, their homeownership rate was 24.5%. And 23.5% of Gen Xers were homeowners at age 24. So, how is Generation Z doing it? By being creative. One of the most popular buying strategies among Gen Zers is called “house hacking.”3 This is when a buyer purchases a multi-family property, lives in one unit, and rents out the others so that the tenants pay their mortgage. House hacking is an effective way to achieve the goal of homeownership while reducing living expenses. This unique approach has become popular among Generation Z for several reasons4: - **High down payments.** According to CoreLogic,5 the average down payment for a U.S. home was 16% in December 2023, equaling an average amount of approximately $84,000—an all-time high.
- **Climbing property prices**. The median sale price of a U.S. home—which currently sits at $422,600—has increased for 13 consecutive months.6
- **Student loan debt.** Like Millennials before them, Generation Z is struggling with substantial debt from higher education. Ready to jump into the housing market? Give Chris Simpson a call 231-215-7229. I would love to work with you on your own home “hack” 1Home Buyers and Sellers Generational Trends, National Association of REALTORS®. 2Giulia Carbonaro, “Gen Z Is finding it easier to buy a home compared to past generations,” Newsweek, last updated May 1, 2024 3House hacking requirements will vary by loan product and the use of rental income can only be allowed under specific underwriting conditions. In addition, requirements for cash reserves and downpayment may also vary by product. See loan officer for details. 4Praveen Chandramohan, “How Gen Z co-purchasing is changing the borrower landscape,” CoreLogic, last updated August 9, 2024. 5Archana Pradhan, “Average home down payment reached all-time high in 2023,” CoreLogic, last updated March 27, 2024. 6Jeff Ostrowski, “Prices still at record levels as existing home sales inch up,” Bankrate, last updated August 22, 2024. Chris Simpson
Nexes Realty Inc.
880 W. Broadway Ave
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