58% of Gen Z Is Rooting for a Housing Crash to Make Homes Affordable
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Zoomers might be getting desperate on the housing front, with a recent survey indicating more than half are rooting for a housing market crash to make homeownership more attainable.
The last major housing crash unfolded nearly two decades ago, when most members of Gen Z were children or had not yet been born. They have instead come of age during almost the opposite housing experience: rapidly rising prices, higher borrowing costs, and a first-time buyer market increasingly difficult to enter.
But after coming of age in a very different housing market — one defined by soaring prices and elevated mortgage rates — many Gen Zers now seem to see a market downturn as a potential path to homeownership. A new survey by Clever Real Estate found 58% of zoomer respondents hope for a housing downturn. That sentiment was even stronger among those carrying student loans, 65% of whom said they are rooting for a crash.
Clever Real Estate surveyed 1,000 Gen Z adults, including 564 current college students and 436 people who graduated within the past five years. Nearly half of the recent college graduates surveyed (49%) said they moved back in with their parents after graduation. Of those, 46% are still there. High living costs were the most commonly cited reason for returning home, followed by saving money for the future and difficulty finding a job.
More than half of all respondents said they believe they are more likely to move back in with their parents sometime during the next five years than purchase a home. Currently, the median age for a first-time homebuyer is sitting at an all-time high of 40.
Unfortunately for zoomers, they’re trying to establish financial independence in an unusually inhospitable job market. Economists have described the current environment as a “low-hire, low-fire” market, particularly punishing for young workers who need employers to take a chance on them. Meanwhile, artificial intelligence is raising existential questions about the future of entry-level white-collar work, according to Fortune.
No doubt those who don’t want to be renters for life are looking at the housing market with deep concern. The median sales price on a home has nearly doubled since 2010 nationally, with most of that spike coming in sharply during the COVID-19 pandemic. And the latest housing report by the National Association of Realtors isn’t giving Generation Z positive signals.
The median price for a single-family existing home rose 1.5% year over year in the second quarter to $434,900 nationally, while prices increased in 80% of U.S. metro areas, according to NAR. Texas remains comparatively affordable, though North Texas isn’t exactly bargain territory: one June measure put the Dallas-Fort Worth median sale price at $409,000.$345,000 in June. Prices in D-FW, though, are all over the place, with the median coming in just under $400,000.
Still, some Gen Zers are finding their way into homeownership, albeit in relatively small numbers. Zoomers aged 18 to 26 accounted for just 4% of buyers over the past year or so and often without following the traditional marriage-and-kids trajectory, according to the National Association of Realtors.
Among those who did purchase, 53% bought on their own, including 35% who were single women. Another 17% purchased as unmarried couples, while 81% had no children younger than 18 living at home.
Younger homeowners also seem to be adjusting their expectations to the realities of affordability. Gen Z buyers had a median household income of $76,000, the lowest of any generation, and were more likely than other age groups to purchase townhouses or rowhouses. Their typical purchase measured about 1,600 square feet with three bedrooms and two bathrooms.
Despite the financial hurdles, enthusiasm for owning real estate remains strong: 39% said they bought simply because they wanted a place of their own, while 71% viewed their purchase as a good financial investment, per NAR.
