Gen Z has taken the lead in the homeownership race.
In 2023, the homeownership rate for adult Gen Zers, or those between 19 and 26 years old, was higher than the homeownership rate for millennials and Gen X when they were 24, according to Redfin, a real estate company.
The race is close, though. About 27.8% of 24-year-old Gen Zers are homeowners compared to 24.5% of millennials when they were the same age. Gen X had a lower rate at 23.5%, Redfin reports.
“I’m so happy with buying a home,” said 24-year-old homeowner Dominic Verrichia, who bought his home in Ventnor City, New Jersey, in October 2020, when the 30-year fixed mortgage rate was 2.83%, according to Freddie Mac.
“I didn’t know if I was making the right call [buying a home],” said Verrichia. “I didn’t know if it was going to turn me upside down.”
Gen Z makes up only 3% of homebuyers, the National Association of Realtors reported. This generation is entering homeownership with the lowest income and is unlikely to be married or have children under 18 in their household.
“It is an incredibly difficult housing market right now,” said Jessica Lautz, a chief economist at the NAR. “We have very limited housing inventory, and have had very limited housing inventory for a long period of time. It has pushed up home prices at the same time that interest rates are at a higher point than they have been in the last few years, which is making the real estate market really unaffordable.”
So how can Gen Z afford homes sooner than their elders could? What implications will that have for the housing market and the U.S. economy?
Watch the video above to learn how Gen Z is winning the homeownership race and how they compare to past generations when they were the same age.
The oldest members of Generation X are turning 59 1/2 this month, the earliest age when workers can start withdrawing retirement assets without a penalty. But many Gen Xers are far from prepared for their golden years, with almost half saying it would take a “miracle” for them to be able to retire, according to a new Natixis study.
Gen X — people born between 1965 and 1980 — is the first generation of U.S. workers to come of age with 401(k) plans as their primary retirement vehicle after employers largely shifted away from traditional pensions in the 1980s. But the 401(k) puts the onus squarely on the shoulders of participants to figure out how much to save, how to invest and how to withdraw their money in retirement — a do-it-yourself approach that noted retirement expert Teresa Ghilarducci has described as flimsy.
That’s left Gen Xers largely on their own to plan for retirement, and many are woefully underprepared, not only in the amount of assets they have squirreled away but in their comprehension of key financial information, according to Natixis, an investment bank. The average retirement savings of Gen X households is about $150,000 — far from the roughly $1.5 million that Americans say they need to retire comfortably.
What Gen X has in common with Jan Brady
Gen X “is the Jan Brady of generations,” overlooked while the larger baby boomer and millennial generations grab more attention, noted Dave Goodsell, executive director of the Natixis Center for Investor Insight. “They were the kids left alone after school, and they are kind of on their own in retirement too.”
About 1 in 5 Gen Xers worry they won’t be able to afford to step back from work even if they were able to save $1 million for retirement, the study found. And about one-quarter is concerned a shortage of savings will force them to return to work after they retire.
Other recent studies have also found that Gen X is in dire shape for retirement, with the National Institute on Retirement Security finding earlier this year that the typical Gen X household with a private retirement plan has $40,000 in savings. About 40% of the group hasn’t saved a penny for their retirement, that study found.
Even so, that’s not keeping Gen Xers from dreaming about retirement, with survey participants telling Natixis they plan to retire at 60 on average. They also believe their retirement will last about 20 years — shorter than what many retirees actually experience.
Such expectations may seem discordant, especially given the lack of retirement savings that they’ll need to fund their older years. But Goodsell chalked up the conflicting views on retirement, with half of Gen Xers thinking they need a miracle to retire even as they want to stop working at 60, to “wishful thinking.”
“The other thing I see is that 48% of people in the survey just stopped thinking about [retirement],” Goodsell noted. “I interpret it as saying they are stressed. But having your head in the sand isn’t a great strategy for anything.”
Many are overly optimistic
Gen X also has some unrealistic views of their potential investment performance, with the group saying they expect their retirement assets to have long-term returns of 13.1% above inflation, the Natixis findings show. At today’s inflation rate of about 3.3%, that would imply an investment return of 16.4% — well above the typical annual return of roughly 10% for the S&P 500.
Meanwhile, only about 2% of Gen Xers understood key aspects of investing in bonds, such as the impact that higher interest rates have on bond prices, the analysis found.
“For a lot of folks, when they are thinking of investing, it’s back-of-the-napkin thinking,” Goodsell said. His advice to Gen Xers is to “learn as much as you can, and be realistic about what you can accomplish.”
Even so, Goodsell noted, there are some aspects to retirement that are out of workers’ hands, which can add to people’s anxiety. About 4 in 10 Gen Xers worry they won’t be able to work as long as they like — and that, by contrast, is grounded in reality, Goodsell noted.
One 2018 study from the Urban Institute that tracked workers from their early 50s through at least age 65 found that the majority had to stop working before they reached retirement age, with 28% stopping work after a layoff, while another 9% retired because of poor health. Only 19% said they retired voluntarily.
Aimee Picchi is the associate managing editor for CBS MoneyWatch, where she covers business and personal finance. She previously worked at Bloomberg News and has written for national news outlets including USA Today and Consumer Reports.
Generation X, often referred to as the “Lost Generation,” finds itself in a precarious financial situation, wedged between the money struggles of millennials and Gen Z on one side and the relative stability of baby boomers on the other. According to a recent Bankrate survey, 47% of Gen Xers (ages 44-59) have more credit card debt than emergency savings.
This statistic paints a picture of Gen X falling behind all generations, with millennials (ages 28-43) faring only slightly better at 46% having more debt than savings, and Gen Z (ages 18-27) at 32%. On the other end of the spectrum, baby boomers (ages 60-78) appear to be in a more comfortable position, with 68% having higher emergency savings than credit card debt — the highest percentage among all generations surveyed.
Don’t Miss:
The average American couple has saved this much money for retirement —How do you compare?
For many first-time buyers, a house is about 3 to 5 times your household annual income –Are you making enough?
The survey data highlights the financial tightrope that Gen X is walking, sandwiched between the debt burdens of millennials and Gen Z, often referred to as the “broke” generations, and the comparatively well-prepared boomers. This Lost Generation moniker takes on new significance as Gen Xers struggle to build a financial safety net amid competing demands of supporting their children and aging parents.
Greg McBride, chief financial analyst at Bankrate, points out the strain many households are facing, stating, “Financing purchases at 20% interest rates is a sign of the financial strain millions of households are feeling.”
The survey also revealed that Gen Xers were the most likely generation to report having less emergency savings than they did a year ago, with 34% admitting to a decline in their financial cushion.
Pew Research Center’s examination of Generation X highlights their significant role as a bridge between the notably different baby boomers and millennials. Despite their critical economic and social position, Gen Xers have often been overlooked in discussions about demographic, social and political changes. Their financial outlook is notably more pessimistic compared to other generations, partly because of the economic stresses associated with middle age.
This bleak reality was echoed on Reddit, which posted an article about Gen X having the largest wealth gap. In the comments, one user wrote, “I feel like I did everything they told us to do and be successful, and I’m sure I’m going to die penniless.”
Another lamented, “I myself have been a casualty of multiple economic downturns, notably the 2008 recession … and, well, it’s not looking good for me.” A third user pointed out, “There’s no safety net under capitalism, but millennials are not the enemy. They’re allies.”
As the generational divide widens, Gen X finds itself at a crossroads, caught between the financial challenges of their children’s generations and the looming retirement prospects of their parents’ cohort. Navigating this middle ground will require a concerted effort to prioritize both debt reduction and consistent savings — a balancing act that many Gen Xers are still struggling to master.
it is never too late (or too early) to start working toward financial stability. Consulting with a financial adviser can play a pivotal role in helping people across all generations to assess their current financial situation, set realistic goals and create a plan to achieve these goals.
Financial advisers can offer tailored advice on a range of strategies to reduce debt, increase savings and plan for retirement, ensuring that individuals are taking proactive steps toward financial health. Whether it’s exploring options to consolidate debt to lower interest rates, setting up an emergency fund to avoid future debts or investing wisely for long-term growth, a financial adviser can provide guidance tailored to each person’s unique circumstances.
Read Next:
*This information is not financial advice, and personalized guidance from a financial adviser is recommended for making well-informed decisions.
Jeannine Mancini has written about personal finance and investment for the past 13 years in a variety of publications including Zacks, The Nest and eHow. She is not a licensed financial adviser, and the content herein is for information purposes only and is not, and does not constitute or intend to constitute, investment advice or any investment service. While Mancini believes the information contained herein is reliable and derived from reliable sources, there is no representation, warranty or undertaking, stated or implied, as to the accuracy or completeness of the information.
“ACTIVE INVESTORS’ SECRET WEAPON” Supercharge Your Stock Market Game with the #1 “news & everything else” trading tool: Benzinga Pro – Click here to start Your 14-Day Trial Now!
