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The Housing Market Is Moving In Favor Of Gen Z
Today’ s disgruntled youth should prepare for the coming change even as they bemoan affordability. By Conor Sen
THE AMERICAN DREAM OF OWNING A home has never seemed further out of reach for young people. You can hardly blame Gen Z and younger millennials for adopting an economic nihilism that prioritizes the here and now— whether that’ s $ 400 Lola blankets or risky crypto trading— over stashing money away for a down payment.
But there’ s an underappreciated cost to this shift in behavior. A recent study by economists at the University of Chicago and Northwestern University highlighted something I’ ve long suspected: Dimming prospects for homeownership push households to consume more and make riskier investments( the authors also found evidence of lower effort at work). Such choices, the researchers say, produce“ substantially greater wealth dispersion between those who retain hope of homeownership and those who give up.” Don’ t give up, Gen Z. Like previous generations, most young people are going to end up owning homes. The housing market is in transition, and despite the current lack of affordability, there’ s compelling evidence that we’ re grinding back toward more normal levels. The only question is whether this adjustment will be fast and disruptive or slow and steady. Today’ s disgruntled youth should prepare for the coming change even while bemoaning the current affordability challenges. The buyers’ strike of the past three years is producing results. Resale housing inventory has climbed toward or above prepandemic levels in most of the South and West. Even in the supply-constrained Northeast and Midwest, there are signs of inventory growth. By 2027— the year in which the oldest members of Gen Z start turning 30— the U. S. will probably have more existing homes for sale than it’ s had in a decade.
This normalization is putting gradual but persistent pressure on prices. At a metro level, price growth is either decelerating or prices are outright falling just about everywhere. A surge in delistings heading into year-end indicates that market dynamics are weaker than advertised home prices suggest. The S & P Cotality Case-Shiller U. S. National Home Price Index rose just 1.3 % in September from a year ago, well below the 3.7 % growth in the average hourly earnings of American workers.
Longer-term, Gen Z will benefit from a coming demographic shift, too. The oldest baby boomers are now turning 80, the age at which homeownership rates start to decline, to say nothing of the inevitability of actuarial tables. Mortgage giant Freddie Mac estimates that the number of boomer-homeowning households declined by 400,000 in 2025. By 2030, that decline will exceed 800,000 a year. By then, members of Gen Z, along with younger millennials, will be in their prime first-time-home-buying years.
JANUARY / FEBRUARY 2026 | FINANCIAL ADVISOR MAGAZINE | 49