Homebuyers have navigated a challenging market in recent years, with rising prices and stubborn mortgage rates fueling dampened homebuyer demand. Ongoing housing gridlock and economic uncertainty have made buyers hesitant to commit to a multi-decade mortgage loan.
Young buyers in particular face unique set of challenges, as they attempt to balance the rising cost of living, student loan debt, an unpredictable job market with saving to buy a home.
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Many Millennials and Gen Z are opting to delay major milestones like getting married, buying a home, and having children. Even the anticipated retirement age has been redefined, an indication that younger generations are adjusting their timelines to adapt to affordability concerns.
Those who don’t want to delay buying a home have implemented creative strategies to manage the rising cost of buying a home.
Rising home prices, high mortgage rates, and a lack of affordability have muted housing market demand, but homebuyers are seeking alternative solutions to afford a home.
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Gen Z and Millennials are reaching life milestones later than their parents
Younger generations face an interesting paradox: endless possibilities, yet limited affordability. Though many Millennials and Gen Zers are opting to delay major life changes due to increased flexibility and shifting priorities, others are forced into it due to the lack of affordability.
The Harvard Joint Center for Housing Studies found that price-to-income ratios soared to the highest point on record in 2022, and have yet to come down. The median U.S. home price is 5.6 times higher than the median U.S. salary, underscoring the surging housing costs relative to income levels.
Though home prices and mortgage rates have increased steadily since the 1970s, prices are comparable even when adjusted for inflation. In 1981, the average house cost $68,950, or $238,450 in 2024 inflation-adjusted dollars, nearly half of the average home sale price $503,800 in Q1 2025.
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Given rising home prices, stagnant wages, and sticky mortgage rates, young Americans are worried major life milestones will be significantly delayed.
According to the Northwestern Mutual’s 2025 Planning & Progress Study, 37% of Gen Z and 34% of Millennials believe they’ll own a home later in life than their parents, and 39% of Gen Z and 30% of Millennials will have children later than their parents did.
Nearly half of younger consumers expect to retire later in life than their parents will, a trend in keeping with growing concerns over outliving retirement savings.
Younger homebuyers are taking creative approaches to help afford homeownership
Although many are choosing to delay homeownership, many buyers aren’t letting a challenging market deter them from buying a house. Young Americans are exploring unconventional pathways to becoming a homeowner.
To afford the upfront costs, many are turning to friends and family for joint ventures and down payment assistance.
Related: Warren Buffett’s Berkshire Hathaway predicts major housing market change soon
Almost half of all newlyweds married in the last two years requested money for the down payment on a house instead of wedding gifts, and 52% opted for a smaller wedding to afford a bigger home.
For single prospective homebuyers, many hope to split the cost and upkeep burden with close friends or relatives. Plus 15% of Americans have purchased a home with someone other than a romantic partner, and 60% would consider doing so with a friend, a trend even more popular with Gen Z.
As the price of buying a home rises, how younger generations approach the housing market may look different than the traditional timelines and paths explored by Baby Boomers and Gen X.
Related: Veteran fund manager unveils eye-popping S&P 500 forecast
