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The American dream of owning a home has never seemed further out of reach for young people. You can hardly blame Gen Z and younger millennials for adopting an economic nihilism that prioritizes the here and now - whether that's $400 Lola blankets or risky crypto trading - over stashing money away for a down payment.
But there's an underappreciated cost to this shift in behavior. A recent study by economists at the University of Chicago and Northwestern University highlighted something I've long suspected: Dimming prospects for homeownership push households to consume more and make riskier investments (the authors also found evidence of lower effort at work). Such choices, the researchers say, produce "substantially greater wealth dispersion between those who retain hope of homeownership and those who give up."
Don't give up, Gen Z.Like previous generations, most young people are going to end up owning homes. The housing market is in transition, and despite the current lack of affordability, there's compelling evidence that we're grinding back toward more normal levels. The only question is whether this adjustment will be fast and disruptive or slow and steady. Today's disgruntled youth should prepare for the coming change even while bemoaning the current affordability challenges.
The buyers' strike of the past three years is producing results.
Resale housing inventory has climbed toward or above pre-pandemic levels in most of the South and West. Even in the supply-constrained Northeast and Midwest, there are signs of inventory growth. By 2027 - the year in which the oldest members of Gen Z start turning 30 - the US will probably have more existing homes for sale than it's had in a decade.
This normalization is putting gradual but persistent pressure on prices. At a metro level, price growth is either decelerating or prices are outright falling just about everywhere. A surge in delistings heading into year-end indicates that market dynamics are weaker than advertised home prices suggest. The S&P Cotality Case-Shiller US National Home Price Index rose just 1.3% in September from a year ago, well below the 3.7% growth in the average hourly earnings of American workers.
Longer-term, Gen Z will benefit from a coming demographic shift, too. The oldest baby boomers are now turning 80, the age at which homeownership rates start to decline, to say nothing of the inevitability of actuarial tables. Mortgage giant Freddie Mac estimates that the number of boomer-homeowning households declined by 400,000 in 2025. By 2030, that decline will exceed 800,000 a year. By then, members of Gen Z, along with younger millennials, will be in their prime first-time-homebuying years.
Admittedly, the vibes around housing and affordability are bad today. But we've been here before.
In the early 2010s, it was millennials who were struggling economically and disillusioned with homeownership, albeit for different reasons. Back then, the unemployment rate for 25-to-29-year-olds was north of 10%, nearly double what it is today. Good jobs were hard to get and concentrated in cities, where homes are always out of reach for young people. It was hard to save a down payment in the wake of the 2008 Great Recession, and many parents had been too devastated financially to offer help. Even for those who could buy, the price collapse in the late 2000s and a shaky labor market meant that tying oneself to a house wasn't necessarily a wise career or financial move.
In the ensuing decade and a half, the majority of those millennials did buy homes - the homeownership rate for 40-to-44-year-olds in 2024 was 65.8%, according to the Census Bureau.
The outlook for Gen Z over the next 10 to 15 years is even better. Starting affordability is worse, sure, but baby boomers were a headwind for millennials, whereas they are a tailwind for Gen Z. Additionally, politicians across parties are talking about making housing more abundant and affordable, so much so that Lennar Corp., the second-largest US homebuilder, pointed to "government action" as an important factor for the market in 2026.
Gen Z also has time on its side. Even in the 1990s, perhaps the best time ever to buy a home, the homeownership rate of 25-to-29-year-olds was around 35%. With each generation delaying adult milestones, buying a home in your early 30s seems reasonable now. There's a pretty good chance that we'll be back at tolerable levels of affordability once Gen-Zers reach that age.
So, if you're in your 20s and pessimistic about buying into the American dream, cheer up, your time will come - and maybe pull some money out of crypto to start saving for that down payment.
(COMMENT, BELOW)
Previously:
• 12/26/25 The South's biggest economic draw is slowly coming back
• 04/08/25 Where will consumers go?
• 09/17/24 U.S. 'Battery Belt' will be a new kind of job magnet
• 09/10/24 Americans have a new piggy bank to raid --- their houses
• 10/03/23 America's greatest public policy success is now in jeopardy
• 09/12/23 The housing market is tilting in favor of renters
• 08/18/23 RIP recession. Is it time to worry about
• 05/24/23 This Goldilocks economy has an end date
• 05/24/23 Bye-Bye, New York. Hello, Fayetteville
• 04/04/23 What makes this economic slowdown different from the others?
• 02/15/23 Higher mortgage rates is what the housing market needs now
• 01/06/23 The January inflation bump Americans should welcome
• 01/04/23 Why millennials are following boomers to the South
• 10/24/22 Two bright spots in a cooling housing market
• 08/18/22 Future remote workers need to network more --- in college
• 06/17/22 Housing market cooldown will only lead to more dysfunction
• 05/27/22 Welcome to our be-careful-what-you-wish-for economy
• 05/04/22 The Amazon economic indicator says inflation is easing
• 01/20/22 Don't call me on Friday. That's my 'me time'
• 01/06/22 2022 is the year to buy your first luxury electric car
• 06/03/21 The post-pandemic boom will have a sequel in 2022
• 05/31/21 Florida may lose some of its boomer shine
• 01/11/21 Colleges bet on football in their own K-shaped recovery
• 12/31/20 Just send the bigger bucks already
• 08/24/20 Young people can't buy homes until older owners . . . move on
• 08/18/20 Our pandemic love affair with e-commerce could soon sour
• 08/10/20 Booming 'zoom towns' should ease city housing costs
• 07/11/20 With a Biden economy, will America be condemned to relive the '70s?
• 07/14/20 Renting and homebuying swap roles in the covid-19 market
• 07/13/20 Markets may have a reason to rise along with covid-19 cases
• 04/27/20 U.S. economy may have hit the coronavirus bottom
• 11/12/19 The 2020 economy should feel a lot better: What to, realistically, expect
• 04/23/19: Gen Z is likely to temper aging socialist millennials
• 03/25/19: All signs point to a housing boom ahead
• 02/19/19: Trump's economic gamble might make sense
• 02/15/19: Scaring off Amazon will backfire for the Left
• 01/29/19: The 2020 election will shred the Obama coalition
• 11/15/18: Amazon proving the 'rich get richer'?
• 11/13/18: How gerrymandering can reduce the partisan divide
• 10/22/18: The politics of the next recession will be a disaster
• 08/02/18: The future of the US looks a lot like ...
• 05/05/18: Brick-and-mortar stores may start to make sense again
• 05/05/18: College admissions season is about to get much easier
• 05/03/18: Changing housing needs of millennials will change economic development
• 02/13/18: The big idea for Middle America is to think small
• 02/07/18: Dems are caught in a tax bill trap this year
• 10/25/17: Good times have come to Trump-leaning states
Sen is a portfolio manager for New River Investments in Atlanta and has been a contributor to the Atlantic and Business Insider.