The Future. Enterprising Gen Zers are buying homes in cheap areas sight unseen in order to build wealth as owners and get cash flow as renters. While a savvy business move, it also puts a spotlight on the wealth disparity already present in the younger generation. Those scooped-up homes — sometimes a portfolio-worth of properties per person — may be heating up the housing market and displacing the Gen Zers who are just trying to buy one home in the area they live in.
Gen Z is looking at homeownership as a day job.
- Gen Zers who have some extra money lying around are purchasing homes in cheap areas like the South and the Sun Belt — without ever stepping foot in them.
- Thanks to new platforms like Mynd and Roofstock, the homes are usually then put up for rental to generate passive income and reap the tax benefits.
The home-buying makes sense. RocketMortgage found in 2021 that 45% of Gen-Z respondents wanted to buy a home within the next five years.
Fork in the generation
But how many are actually doing it? LendingTree found among its platform user base that “Gen Zers accounted for an average of 10% of homebuyers in the 50 largest US metros in 2021, up from nearly 6% in 2020.” That’s a lot of young adults sticking to their word.
But there’s an issue. Like with every other generation, only those that can afford the down payment can actually afford a home. And for many Gen Zers, that money comes from a mix of a good job in a high-net-worth area and parental help. It’s no wonder that Freddie Mac found that 34% of Gen Zers don’t think they’ll ever be able to afford a home.