Redfin Finds Young Homeowners More Likely Than Young Renters to Feel Financially Better Off
(Image courtesy of Redfin)
Around two-thirds of Millennial and Gen Z homeowners say they’re better off financially than they were four years ago, compared to just over half of Millennial and Gen Z renters, according to a new Redfin survey.
The discrepancy between how younger homeowners and renters feel is much larger than how older homeowners and renters feel. For example, Gen X homeowners were more likely than Gen X renters to say they’re faring better than they were four years ago. However, it isn’t by much – at 42.6% of homeowners to 38.8% of renters.
As recently as four years ago, Millennials were considered the “unluckiest generation” given their relatively weak economic standing, but this began to shift during the pandemic. Masses of young Americans bought their first home either during the pandemic or the years leading up to it, and then benefited from an historic surge in home values fueled by the 2021-2022 homebuying boom. This moment in time helped many young people build tremendous home equity, and home values are still on the rise today.
“Economic inequality is on the rise between young people who have been able to break into homeownership and young people who haven’t,” said Redfin Economics Research Lead Chen Zhao. “There was a short window during the pandemic when mortgage rates were extremely low, allowing a lot of Millennials and Gen Zers to buy homes—but not everyone could afford to take advantage of the window. Housing affordability has worsened dramatically since then, with mortgage rates now more than double their pandemic low and home prices near their record high. As a result, many young folks are priced out of homeownership and the wealth gains that come with it, and many of the people who did buy homes during the pandemic couldn’t afford to buy their same home today.”
Although rent growth has flatlined over the last year, asking rents are still roughly 20% above pre-pandemic levels, and many renters are struggling to make ends meet as they also grapple with the elevated cost of other goods such as groceries. Nevertheless, most young renters say they’re faring better than four years ago and are much more likely than older generations to say so. That may be because they’re much more likely than older renters to experience big pay bumps as they move up the ladder in their careers.
The Lion’s Share of Baby Boomers Report Being Worse Off Than 4 Years Ago
Baby Boomers were the only surveyed generation for which the majority of respondents said they’re worse off financially than they were four years ago; 38.2% of Baby Boomer homeowners and 40.2% of Baby Boomer renters reported being worse off. Zhao explained that this could be because many Baby Boomers are living on a fixed income.
As a comparison, 18% of Millennial and Gen Z homeowners and 26.2% of Millennial and Gen Z renters said they’re worse off, and 33.1% of Gen X homeowners and 35.9% of Gen X renters said they’re worse off.
This data is according to a Redfin-commissioned survey conducted by Ipsos in September 2024. The survey was fielded to 1,802 people aged 18-65. For the purposes of this report, Redfin defines Gen Zers as those aged 18-27, Millennials as those aged 28-43, Gen Xers as those aged 44-59, and Baby Boomers as those aged 60-65.
To view the full report, including a chart and methodology, please visit: https://www.redfin.com/news/young-homeowners-financially-better-off-survey.
