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9
Will Gen-Z Ever Buy a Home?
By Timothy Compton
My friend group consists of a handful of twenty-somethings who would be there for each other day and night. We laugh together, we pick on each other and even lend each other a few dollars from time to time. Every week, the four of us find ourselves sitting in a lop-sided circle under one of our carports. Usually in a mis-matched set of camping chairs on their last limb.
Last year during one of these sessions, I spoke up and said, "I think I'm going to become a Realtor." A short pause from the group.
"Do people still even buy houses?"
If you're one of the Roanoke Valley's 1,800 real estate licensees, this question may seem out of touch. If you were born between 1997-2006, commonly known as Generation-Z, this may seem like a valid question. Especially if 73% of your generation did not own a home.
Luckily for everyone, the answer is a capital Y: Yes.
Folks in the Roanoke Valley are buying homes. But the average age of these buyers does not suggest that my generation is taking much part just yet. At least not as early as their parents were. In 2006, as the last year of Gen-Z was born, the average age of the first-time home buyer in the US was 32. Today in 2026, the age is 39.
I'd bet my down payment that by the time the four of us get out of these camping chairs, that number will have increased. But the Why's and more importantly, the How's, are harder for my generation to discover. I take it as my responsibility to make those things as clear as possible.
Simply put: Gen-Z is being outpaced by the market. A combination of a supply shortage, rising prices, questionable wages and what some are considering poor spending habits is pushing the average age of a first-time home buyer back even further.
Let's take a closer look.
1. Supply
Leading up to the 2008 financial crisis, home developers were reacting to an ever-growing housing market. They were building new homes at a record pace as more Americans were able to qualify for mortgages. Many of those mortgages were considered to be "sub-prime," meaning they had terms less favorable for the buyer but nonetheless got them in (and out) of the home easily.
In 2005, we saw a record 1.72 million new homes begin construction in the US. When the party came to an end in 2008, that number plummeted to 622,000. By 2011, the US hit a low of 431,000 new home starts. We didn't cross the one million mark until 2021, only to drop to 943,000 by 2025. Collectively, between 2005 and 2009, the US saw a 74% decline in home production.
We had many years of not building enough homes to keep up with a population beginning to reach the home-buying age. Why?
Because when 3.1 million Americans were foreclosed on their home in 2008, the market was flooded with homes for sale. More and more options for buyers meant that prices dropped quickly and home developers had no reason to continue building.
Would you as a developer build a $100,000 home if the market suggested it would be worth much less in 6 months? You would go out of business and likely default on your own mortgage.
Would you as a buyer purchase that same home?
2. COVID-19
Heard of it?
During the pandemic in 2020, interest rates in the US dropped just below 3%. This was a historic low for the US. People could suddenly afford a mortgage payment much easier.
Combine that with the expectation that working from home may become the new normal and with extra cash on hand from stimulus checks and a bullish stock market, buyers flooded the market.
Many homeowners refinanced to take advantage of the lower rates in order to have a lower mortgage payment. This caused many homeowners to become reluctant to sell, which restricted inventory even more and put additional pressure on the market.
But it wasn't only everyday people in a rush to buy a home. Investors and institutional home buyers all wanted in on an opportunity that we may never see again.
We saw prices surge and by the time the market cooled with rates jumping back up to 6-8% in 2023, we had a housing market with inflated prices like we've never seen before.
Gen-Z simply couldn't afford the payment.
By this point, we were well into an inventory crisis and were feeling the effects of inflated home prices provoked by a global pandemic. Younger buyers didn't stand a chance.
3. Financial Discipline
I'm going to speculate here. This is something harder to prove with a statistic but may be easy to believe depending on your own experience.
Between unlimited ads, endless subscriptions and my favorite, DoorDash, young people have a lot of extra distractions pulling at their wallets.
There is an argument that says Gen-Z is simply less financially disciplined than their parents. Therefore, we have a harder time saving for a down payment, closing costs, etc.
One school of thought believes this could be one reason holding Gen-Z back from buying a home.
Another argument claims, "Well, we can't afford it anyways, might as well get a bite to eat."
Both sides can be argued well. But with an issue as complicated as this, it's rarely ever one thing.
It's many things working together.
Final Thoughts
My generation has… memorable qualities. We wear our hearts on our sleeves, we require yet scold efficiency and then there's the humor.
As much as I love my generation, I feel as if we have a bad habit of shaking our fist at the sky. Yet I do think that can be justified at times.
The expectation of doing as well if not better than our parents is a long, human tradition. Especially when it comes to one of the most basic elements such as housing.
I didn't make much of an argument for wages not keeping up with production. Mainly because I consider this to be a well-known fact that most Americans agree with.
The US has become increasingly productive since the 1970s. Many believe the hands driving this productivity aren't being compensated equally, making it even harder for some to enter the housing market.
But, there is good news.
A 2025 study cited that 18.5% of home purchases in America were made by 18-29 year olds. Gen-Z IS buying homes, just at a slower pace and with many challenges in front of them.
My advice to anyone like me who is in your 20s: live below your means, choose the starter home over the one in your parents' neighborhood (that shouldn't be hard) and come to understand why and how we got here.
There has always been pressure to have it all together in your 20s. Whether it be moving out, having a job your parents can brag about or owning a home.
Times have changed and are changing right before our eyes.
Educate yourself, skip the DoorDash and reach out if you have any questions.
I'm here to help.
Timothy Compton, REALTOR540-988-3491TimComptonRealtor@gmail.com
Sources:
https://www.redfin.com/news/homeownership-rate-by-generation-2025/
https://www.census.gov/construction/nrc/data/series.html
https://fred.stlouisfed.org/series/HOUST1F
https://www.redfin.com/news/homeownership-rate-by-generation-2025/
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