Younger Americans pursue unconventional paths to owning a home
Owning a home remains a key goal for Gen Z. According to BMO’s Real Financial Progress Index, 69% of Gen Z adults consider homeownership a major life milestone. Yet, nearly half of all Americans - regardless of age - now believe the goal may be out of reach.
High home prices and limited supply have reshaped expectations. The median sales price hit $420,400 in late 2024, up nearly 59% since Gen Z began entering adulthood, according to the Federal Reserve Bank of St. Louis.
Tapping retirement to buy a first home
With savings stretched thin, many young buyers are turning to their 401(k) accounts. Forty-five percent (45%) of Gen Z prospective buyers plan to use funds from a 401k in 2025.
While technically allowed under certain conditions, financial experts caution against the practice. Experts noted that early withdrawals can reduce long-term retirement gains and may trigger taxes or penalties if not handled carefully.
The Bank of Mom and Dad - and new tools
Family support remains essential. A majority of Gen Z and Millennial homeowners say they relied on financial help from relatives to afford a down payment or closing costs.
Others are exploring digital solutions like fractional real estate investing. According to investment platform Arrived, 87% of Gen Z respondents believe real estate is key to wealth building. The company reports that 58% of users born after 2000 begin with investments of $100 or less.
“Coming of age amid skyrocketing home prices and pandemic-era economic turbulence has given some of Gen Z financial whiplash,” said Cameron Wu, vice president of investments at Arrived.
Signs of a path forward
Recent data show modest improvements. Pending home sales rose 6.1% in March, buoyed by a dip in mortgage rates to an average of 6.55%. Analysts expect home price appreciation to slow to 3.2% in 2025, offering some relief to first-time buyers.
“The data show that owning a home remains a key component of the American Dream,” said Paul Dilda, head of US consumer strategy at BMO. “But with some obstacles still facing first-time homebuyers, younger generations worry they missed their moment.”
Even as they rewrite the financial playbook, Gen Z continues to pursue homeownership - not as a fading ideal, but as a future they are working to reshape.
What are your thoughts on how Gen Z people are trying to achieve their dream of homeownership? Share your insights below.
