Vazquez is part of a small but growing share of Gen Zers managing to buy a home despite historically unaffordable prices, and when the average age of first-time buyers has climbed to 40. They are outpacing millennials, many of whom also struggled to buy at the same age. They’re less likely to use help from parents and far more likely to be single buyers, especially women.
“Gen Zers seem to have learned from millennials,” said Jessica Lautz, deputy chief economist at the National Association of Realtors, which tracks buying trends. She also credits their use of social media for financial planning. “They’re embracing the knowledge that is at hand.”
A job in fast food and an aggressive savings plan
Vazquez changed careers to make homeownership happen. He’d majored in conservation science, on a scholarship with no student loans, then moved to Texas to work in that field. First, he helped rescue alligators and place them in a sanctuary, then got a job at a zoo.
He loves animals and said the jobs were “super fun.” But the pay was so low he started questioning the value of his college degree.
“I wasn’t going to be able to support a wife, let alone kids, or buy a home,” he said.
Making it financially is important to Vazquez. Growing up, his parents didn’t have much and relied on government assistance. So he moved back home to Wisconsin thinking he’d become an electrician, but stumbled on a job posting to help manage a fast food restaurant. It turned out to have great pay and benefits. He got the job and he’s been promoted twice.
For two years, one living with his parents and one renting on his own, he saved aggressively.
“Most of my paycheck, probably like 70%, [went] into just a broad index stock,” he said. Vazquez is newly married but bought the house on his own. He’s part of a larger shift, with the share of single Gen Z buyers so far double that of millennials.
The biggest challenge to his Spartan spending plan was when he started dating the woman he would later marry, who felt they should spend a bit more to have fun while they’re young. “She’s definitely helped me balance in that regard,” he said.
Still, Vazquez was able to build up a whopping $72,000 in savings in just over two years. Milwaukee is also among a number of smaller, affordable cities where Gen Z is more likely to buy. At $220,000, his home was nearly half the national median price.
By putting down a large down payment, Vazquez – not yet 30 – has a 15-year fixed-rate mortgage and an ambitious plan for the future.
“My biggest goal at the moment is just to retire early,” he said. “So buying a home helps me buy myself more freedom in general.”
More than a third of Gen Z buyers are single women
The rise in the youngest homeowners is noteworthy because of the odds stacked against them.
A massive housing shortage has pushed prices to record high unaffordability for both renters and owners. Rising home costs have far outpaced paychecks. Lower-cost starter homes have disappeared in many markets, while most new construction is geared to the higher end.
People in their 20s remain a sliver of buyers overall, but they’re growing. The National Association of Realtors found last year 4% of homebuyers were Gen Z, up from 3% the year before. It counts buyers 18-26, although other definitions of the generation include those a couple years older.
Overall, Gen Z homebuyers had an average household income of $76,000, according to the Realtors Association. And they are financially savvy.
“They’re taking advantage of government [down-payment assistance] programs at higher rates than all other generations,” said NAR economist Lautz. “They seem to be a little more reticent when it comes to student loan debt, which has historically been one of the biggest hurdles for millennials to enter into homeownership.”
While 16% of Gen Z buyers did get a gift or loan from parents, that’s lower than for young millennials, and less than the traditional average of 25% of all ages who use the bank of mom and dad. Instead, Gen Zers are more likely to tap a 401K, which is possible because they’re saving for retirement earlier than the previous generation.
