People often joke about needing to win the lottery in order to be able to afford something, so it’s not that surprising that a recent poll found that 52% of Gen Z and 57% of Millennials feel like they’d need to hit the jackpot in order to buy a home. There’s literally a show on HGTV that follows recent lottery winners around as they search for their dream home!
Unfortunately, while a winning lotto ticket would certainly make buying a home easier, it isn’t a surefire plan to become a homeowner.
But apparently a good portion of Gen Z must have had a plan in place, because Business Insider recently reported that they outpaced Millennials and Gen X’ers in the race to homeownership at a young age. Thirty percent of them owned a home of their own by the age of 25.
Sounds like they’ve either got a secret formula to success, or some luck on their side, right? How is it that a third of the youngest generation is out there owning homes, when it’s been one of the toughest markets in history over the past few years?
Well, not to take anything away from them, because it’s quite a feat to have done so given the recent market conditions, but they’re not actually outpacing the two previous generations by all that much. Twenty-eight percent of Millennials and 27% of Gen X owned a home when they were 25-years old as well. So, those stats are pretty much in line with history over the past couple of generations.
And Millennials as a whole aren’t doing that poorly either. RentCafe recently reported that the majority of them are now homeowners, as of 2022. As you can see in the chart below, they haven’t quite caught up to Gen X, but they’re actually well ahead of Gen Z in terms of the actual number of homeowners.
Source: RentCafe
So, the attention-grabbing headlines about Gen Z doing so much better are just about the small edge they had at the young age of 25.
You can’t chalk up all of those young homeowners to having won the lottery. Sure, perhaps some did, or had more career luck or financial help on their side. But you also can’t chalk up not being able to buy a house entirely on the current market, home prices, or mortgage rates. In fact, a small percentage more young homebuyers were able to do so during a very competitive, high-priced market.
Over the course of decades, statistics show that about a third of a generation will buy a house before they’re 25-years old. And if you traveled back in time, you’d probably find plenty of headlines saying that the younger people at the time felt that homeownership was nearly impossible, and they’d need to win the lottery to ever have a chance at owning a home of their own. Yet a third of them figured it out. And, as time passed, more and more of them got there as well.
It’s never super easy for anyone to buy a house, let alone a younger person. But it can be done, regardless of the current real estate market you’re facing. And if buying a house before you’re 25 doesn’t happen, it’s by no means a sign that you won’t get there.
What’s the secret sauce to getting there at the youngest age possible?
While winning the lottery would be great, it really boils down to your desire to make it a reality; focusing on what you need to do to get there; and putting in the time and effort it takes.
The Takeaway:
A recent poll found that 52% of Gen Z and 57% of Millennials feel like they’d need to hit the jackpot in order to buy a home. Yet a third of both those generations owned a house before they even hit 25-years old!
It’s not easy for most people to buy a house, let alone when you’re on the younger side. But it can be done, even when the market is highly competitive and conditions aren’t ideal. And even if you’re not able to buy a house before you’re 25, don’t think that you’ll never be able to.
Winning the lottery would be great and certainly help, but the real secret to buying a home is having the desire to make it a reality: Focusing on what you need to do to get there, and putting in the time and effort it takes.