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Gen Zers and Millennials Believe Winning the Lottery is Necessary to Afford a Home

Photo courtesy of Erik McLean via Unsplash.

The American dream of homeownership is not dead, even for Gen Zers and millennials, but they believe their path to get there will be challenging. Many even think it will require some luck given the affordability challenges facing many buyers today. New research from Zillow finds that 52% of Gen Zers and 57% of millennials who don’t currently own a home believe they’d need to win the lottery to afford one.

Outside of winning the lottery, large shares of both generations (95% of Gen Zers and 94% of millennials) say they would have to make some life changes in order to make their dream of homeownership a reality. About 40% of millennials say they would need to get a second or third job, and 28% of Gen Zers say they’d have to make a career change in order to afford a home right now.

Affordability crisis

The housing affordability crisis is the worst it’s been in at least 15 years. Home values are up 3% over the past year. But during the peak of the pandemic, home values were rising in the double-digits. Record-fast home value growth has already been squeezing budgets. And now rising mortgage rates are compounding the affordability challenges many buyers are facing.

Related: “She Sheds” Add Value When Selling a Home

“These findings highlight the gap between Gen Z and millennials’ dream of owning a home and their ability to actually make it happen,” said Zillow’s home trends expert Amanda Pendleton. “Mortgage rates have been on the rise since last year, sending monthly housing costs through the roof. The typical monthly mortgage payment is now $431 higher than a year ago. Combine rising rates with record-breaking home value appreciation and it’s easy to understand why younger generations are wondering how they’ll ever be able to afford a home.”

What’s needed to own a home

When it comes to a down payment — a major barrier to homeownership — 36% of Gen Zers say they’d give up social media if it meant having enough cash to put down on a starter home.

To put the down payment challenge in perspective, 20% down on the typical U.S. home ($334,944) means coming up with nearly $67,000. In pricier markets, a down payment can easily exceed six figures.

In order to buy a home right now, I would needGen ZersMillenials
Win the lottery52%57%
Give up all spending on clothing,
dining and entertainment
26%27%
Get a second or third job27%39%
Move to a different city20%25%
Marry someone with savings26%16%
Change careers28%22%

Still, these two generations are optimistic about the future. About two-thirds of the Gen Zers and millennials surveyed say it’s realistic to think they can buy a home within the next five years.

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