Nearly a third of 25-year-olds in the United States will own their own home by 2022, supplanting their millennial and Gen X counterparts, according to a new report from Redfin. (Getty Images)
SEATTLES —
According to a new report from Redfin, nearly a third of 25-year-olds in the United States will own their own home by 2022, supplanting their millennial and Generation X counterparts.
Homeownership rates among Millennials (28%) and Gen Xers (27%) when they were 25 registers lower than Gen Z (30%), according to the Seattle-based real estate brokerage firm, which said 32% of baby boomers owned their homes by Gen 25 Z consists of people born between 1997 and 2012.
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Many Gen Zers took advantage of historically low mortgage rates during the COVID-19 pandemic years of 2020 and 2021, Redfin noted. However, prices have since doubled.
“Those who haven’t bought homes during this period may struggle to break into the market now that housing costs have skyrocketed and the economy is showing signs of slowing,” Redfin said in his report.
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Redfin’s report is based on national data. The average monthly mortgage payment for a 25-year-old in 2021 was $1,013, which is 16% of their median income of $74,900, Redfin reported. In 1990, the median monthly payment was $904, which was also 16% of the median income of $69,419, which Redfin adjusted for inflation.
In Seattle, the average selling price of a home fell 13.5% year over year to $768,832, according to statistics from Redfin. Millennials will buy more than 40% of homes in Seattle by 2022, according to Redfin.
Millennials are lagging behind their parents in homeownership rates, Redfin said, as 62% of 40-year-olds owned their own home in 2022, far below the 69% rate of baby boomers of the same age. About 60% of homes bought in recent years have been bought by people aged 25 to 44, Redfin reported.
Gen Z will buy 9% of Virginia Beach homes in 2022, Redfin found.
“The rising tide has given a boost to Gen Z homebuyers in 2020 and 2021; They were part of the pandemic-induced homebuying frenzy,” Redfin chief economist Daryl Fairweather said in a statement. “Record-low mortgage rates, long-distance work that offers the freedom to move somewhere cheaper, and skyrocketing rental costs motivated some Gen Zers to get into the housing market. While the elders of her generation were just out of college when the pandemic hit and hadn’t started building their bank accounts, they had some financial advantages.
“The unemployment rate was near record lows in late 2021 and 2022, with pandemic-related labor shortages in sectors like hospitality and retail that attract young workers prompting those employers to raise wages. Government stimulus payments, the pause in student loan repayments and the fact that many young adults were living with family during the lockdown also helped Gen Zers save money.”
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