How Gen Zers Are Getting Around The Ever-Increasing Cost Of Housing To Buy New Homes, According To New Research
Gen Zers aren't giving up on the dream of becoming homeowners.
GBJSTOCK | Shutterstock The reality of owning a home is something that young people have come to realize might not be in their future. The housing costs across the country have risen exponentially, and it's gotten to the point where young adults have had to face the fact that ludicrously high down payments and stifling mortgage payments mean they will either have to stick with renting or live with their families.
However, a recent study by Bank of America found that Gen Zers have discovered a loophole to becoming homeowners. It appears that Gen Z adults are opting for co-ownership with family to make their dreams a reality.
Gen Zers are getting around the real estate costs by buying new homes with their siblings.
According to the Bank of America Institute survey, more Gen Zers are teaming up with their siblings to buy homes. On top of that, they're also choosing to take on extra jobs to cover the costs.
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Researchers found that 30% of Gen Z homeowners paid for their down payment by taking on an extra job, an increase from 28% in 2024 and 24% in 2023. The real trick they employed to navigate the high cost of homeownership was that 22% bought their homes with siblings, an uptick from 12% in 2024 and just 4% in 2023. That's a whopping increase.
"Despite financial hurdles, the dream of homeownership remains a powerful motivator for Gen Z and millennials, who are making sacrifices in the present to prioritize the long-term financial security a home can provide," Bank of America's Homebuyer Insights explained.
Buying a home with a sibling is actually a safe way to enter the housing market.
Most people dream of homeownership as a sort of launchpad into adult life, but with the financial constraints associated with an astronomically priced housing market, the only way to take that leap is with another person. If parents can't contribute, the safest bet is a sibling.
Gen Zers might not be at a point where they are ready for marriage, but they are ready to invest in real estate. It's certainly much safer to invest with a family member than a friend or romantic partner who may or may not be part of your life down the road.
Credit.com noted that not only does co-ownership open the door to better investment opportunities, but it also allows you to enter into the agreement with a clear contract that tackles everything from payment responsibilities and buyouts to inheritance questions. When you have more money for a mortgage and down payment, the potential resale is also higher.
It's important to remember that there needs to be a clearly defined agreement in place before jumping into a co-ownership situation with a sibling. You never want lifestyle changes or financial disagreements to hurt that familial relationship.
There are still a large number of Gen Z adults forced to rely on their parents to help them buy homes.
In a 2024 Redfin-commissioned survey, more than a third of millennials and Gen Zers who are planning to buy a home expect their parents, or family, to help with their down payment in the form of a cash gift. Redfin's data journalist, Dana Anderson, explained that if not cash, young adults are instead choosing to buy a home by dipping into their inheritances to fund their down payments.
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On the other hand, many younger people are also planning to just live with their parents or other family members to save money. They are also twice as likely to ask their parents for money for a down payment on a house compared to just five years ago. However, not every family can afford to help, which seems to circle back to the argument that practically no one can afford to buy a home.
"The bigger problem is that young Americans who don’t have family money are often shut out of homeownership," explained Redfin’s chief economist, Daryl Fairweather. "Many of them earn a perfectly good income, too, but they aren’t able to afford a home because they’re at a generational disadvantage; they don’t have a pot of family money to dip into."
When it comes to affording a home, it's disheartening that many young adults feel strongly that they'll never be able to. For the people who may not have a close relationship with their family, or even have siblings to live with, they're left with less desirable options, including having to rent or even live in an area that's far from work, family, and friends, because it's cheaper.
Nia Tipton is a staff writer with a bachelor's degree in creative writing and journalism who covers news and lifestyle topics that focus on psychology, relationships, and the human experience.
