The Homeownership Gap Between Generations Is Wider Than Ever — Here's Why
Buying a home by age 32 is associated with 22.5% higher net worth at age 50 than waiting until your 40s, according to Realtor.com.
Only 38.3% of 28-year-old Gen Zers owned a home in 2025, Redfin found. Boomers hit 44.4% at the same age. Gen Xers hit 42.5%. The pattern holds into the mid-30s, too. Just 57.2% of 36-year-old millennials own homes today. Boomers were at 63.7% at age 36.
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"Gen Zers and millennials are making small gains in homeownership because they're eager to buy, they're making sacrifices, and because affordability has improved a bit at the margins — not because homes suddenly became affordable," said Asad Khan, senior economist at Redfin.
The Price-to-Income Gap Has Widened Significantly
In 1990, the median home price was $96,800, and the median household income was $31,000, a price-to-income ratio of about 3.1, according to Realtor.com.
Today, the median home price is $418,000, and the median household income is $85,000, pushing that ratio to 4.9. In major job markets, it runs higher.
The National Association of Home Builders estimates that the income needed to comfortably afford a median-priced home is around $121,000 per year.
Older Homeowners Are Not Selling
There is also a supply problem driving prices up further.
Most boomers and Gen Xers refinanced between 2020 and 2022 and locked in rates between 2.5% and 3.5%, according to Redfin. Selling means giving that up and financing a new purchase near 7%. For most, it does not make financial sense to move. So they stay put.
First-time buyers made up just 21% of all home purchases in 2025. The National Association of Realtors (NAR) has tracked this figure since 1981 and has never recorded it lower.
"The historically low share of first-time buyers underscores the real-world consequences of a housing market starved for affordable inventory," said Jessica Lautz, NAR deputy chief economist. "That share has contracted by 50% since 2007."
Student Loans Complicate Qualifying
Carrying student debt does not just slow down savings. Lenders count monthly loan payments against a borrower's debt-to-income ratio when reviewing mortgage applications.
"Student debt impacts a prospective homeowner twice," said Cody Schuiteboer, president and CEO of Best Interest Financial. "It reduces the debt-to-income ratio, which affects mortgage qualification. And every dollar going toward a student loan cannot be saved toward a down payment."
Deferred loans count too. An extra $400 to $600 in monthly obligations can knock a buyer out of the qualifying range, even with a solid income.
What Buyers Are Actually Doing
Younger buyers who are closing deals share a few common moves, according to Redfin: purchasing smaller homes, relocating to more affordable metros, or leaning on family help to cover the downpayment.
On the financing side, Ryan Winslow, a licensed loan officer at Novus Home Mortgage, points to stacking low-down-payment loan programs with state assistance grants. He says buyers using both strategies have been closing up to 18 months sooner than those going the conventional route alone.
For buyers not quite ready, Schuiteboer has one consistent piece of advice. "Visit a mortgage professional 12 to 18 months before you plan to buy. Get a clear picture of where you stand and work backward from there."
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This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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