Millennials and Gen Z Are Jumping on This Hot Real Estate Trend to Afford Homeownership
The hack is helping many first-time buyers enter the market.
Key Takeaways
- The housing market is the least affordable since 1984, with average 30-year mortgage rates reaching 7.66% this month.
- More than 50% of millennial and Gen Z home buyers value the ability to rent all or part of their properties for additional income.
We’re currently in the least affordable housing market since 1984 — and it’s only getting worse, CNN reported earlier this month.
The average rate on 30-year fixed mortgages hit 7.66% earlier this month, though it’s since fallen back farther from the 8% mark, according to Bankrate‘s weekly national survey of large lenders.
Related: 3 Trends Driving the Millennial Own vs. Rent Debate
Baby boomers make up 39% of home buyers (the most of any generation) and may soon rock the market with a so-called “silver tsunami.”
But many millennial and Gen Z buyers are getting creative to afford homeownership — with “house hacking,” or renting out part or all of a home for additional income, emerging as an increasingly popular option among them.
More than half of successful millennial (55%) and Gen Z (51%) buyers say the ability to rent out part or all of their homes for rental income is “very” or “extremely” important, according to Zillow’s 2023 Consumer Housing Trends Report.
Forty-three percent of all successful home buyers across generations share that sentiment.
And even more prospective buyers — household decision makers aged 18 and older who plan to buy a home in the next year — say it’s important to have the opportunity to rent out the entire home in the future to generate rental income: 64% of millennials and 56% of Gen Z.
More than half of Gen X agreed on that front (51%), as did some baby boomer and Silent Generation buyers (23%).
Additionally, the study revealed that the affordability crisis has an even greater impact on households of color: 51% of Latinx home buyers prioritize the potential for house hacking compared to 46% of Black buyers and 40% of white buyers.
Key Takeaways
- The housing market is the least affordable since 1984, with average 30-year mortgage rates reaching 7.66% this month.
- More than 50% of millennial and Gen Z home buyers value the ability to rent all or part of their properties for additional income.
We’re currently in the least affordable housing market since 1984 — and it’s only getting worse, CNN reported earlier this month.
The average rate on 30-year fixed mortgages hit 7.66% earlier this month, though it’s since fallen back farther from the 8% mark, according to Bankrate‘s weekly national survey of large lenders.
The rest of this article is locked.
Join Entrepreneur+ today for access.
Subscribe Now
Already have an account? Sign In
