For many in Gen Z, the dream of owning a home hasn’t died. It’s just been delayed, sometimes indefinitely, by the weight of debt, the lure of risk and a financial mindset that focuses more on now than later.
In 2025, Gen Z made up just 3% of all homebuyers, according to the National Association of Realtors®, a tiny sliver compared to the 42% of purchases made by baby boomers. It’s not that Gen Z doesn’t care about homeownership. They do. But they’re stuck juggling other priorities—chief among them, paying off debt.
According to data from PYMNTS Intelligence, the average Gen Z adult is carrying a jaw-dropping $94,101 in personal debt. Most of it comes from credit cards, and those monthly payments eat up cash that could’ve gone into savings or a down payment. Even high earners in Gen Z are feeling the squeeze.
So while they may scroll past Zillow listings and daydream about starter homes with little porches or sleek condos with skyline views, many Gen Zers know those dreams aren’t within reach right now. They’re not walking away from homeownership. They’re just trying to clean up their financial house first.
“Though Gen Z Americans may dream of homeownership, still-high housing costs mean that stepping onto the property ladder may not be possible at this point in time,” says Hannah Jones, a senior economic research analyst at Realtor.com®. “By prioritizing paying off debt, Gen Z prospective buyers are setting themselves up for success when homeownership does become more feasible.”
Planners vs. Reactors: Why Gen Z Falls Behind
PYMNTS breaks down financial behavior into two camps: Planners and Reactors.
- Planners save proactively, pay off credit cards each month, and work toward long-term goals like retirement and homeownership.
- Reactors deal with money on the fly, handle bills as they come in, and often lean on credit or loans to get through the month.
An overwhelming 73% of Gen Z fall into the reactor category.
This means most are living paycheck to paycheck, constantly putting out financial fires, rather than building toward big-picture goals. In that context, saving tens of thousands for a down payment can feel like chasing a mirage.
And it’s not just Gen Z. The reactor mindset is spreading, even among six-figure earners. Since early 2024, the share of high earners who identify as planners has dropped by 25%, with more than half now acting like reactors. In today’s world, short-term thinking isn’t just common: it’s contagious.
Risk Over Stability: The Gen Z Gamble
There’s another layer to this story: Gen Z is more risk-tolerant than their parents and grandparents ever were.
While 22.1% of baby boomers say their top financial goal is saving for retirement, only 7.7% of Gen Z say the same. Instead, nearly 7% of Gen Z say their number one goal is starting a business—eight times the rate of boomers.
It’s bold. It’s entrepreneurial. It’s also financially unstable.
“Gen Z Americans have time on their side and may be more willing to take big swings financially, while older generations are more risk-averse,” says Jones.
But here’s the catch: lenders aren’t impressed by hustle alone. Irregular income, high credit usage, and thin savings profiles are red flags in the world of mortgages. Even a successful Gen Z business owner might struggle to show the steady income or credit history needed to secure a loan.
It’s a frustrating paradox: the more you chase financial freedom, the harder it gets to prove you’re ready for the kind of traditional milestones that define it.
The Numbers Don’t Lie
Let’s not forget just how much harder it is to buy a house today than it was for previous generations. Buyers now need to earn 70% more than they did six years ago to afford a home. And the gap between today’s housing costs and what boomers faced in the ’60s and ’70s? That’s not just a gap. It’s a canyon.
In this environment, Gen Z’s focus on paying off debt or starting a business isn’t foolish, it’s adaptive. Why scrape together savings for a home you can’t afford anyway, when you could take a shot at building wealth on your own terms?
Still Dreaming, Just Not Right Now
Despite the obstacles, Gen Z hasn’t turned its back on homeownership. It’s still their second most important financial goal, with 14.1% saying it’s a priority.
But here’s the tricky bit: the longer they wait, the further out of reach it may get. Housing prices aren’t slowing down, and mortgage requirements aren’t getting any looser. So every year spent paying off debt or taking entrepreneurial risks, without a savings plan in place, could push that white picket fence further into the future.
And because mortgage lenders look closely at savings, credit utilization, and income consistency, the same reactive behaviors that feel necessary right now may delay Gen Z’s homeownership timeline, even when they’re finally ready to buy.
What Needs to Change
If Gen Z wants to close the gap between ambition and action, they’ll need to shift how they manage their money, not just what they care about.
The good news: Paying off debt is actually a great start. It improves your credit score, lowers your debt-to-income ratio, and makes you a more attractive borrower. But the bigger leap is switching from a reactive to a proactive mindset.
Here’s how Gen Z can move the needle:
- Automate savings, even if it’s just a small amount each month.
- Track spending to see where money is really going—and cut back where it’s not adding value.
- Use credit cards strategically, aiming to pay off balances in full.
- Pursue dual goals, yes, pay off debt, but also stash something away for the future.
Chasing Big Dreams and a Place to Call Home
Gen Z doesn’t lack ambition. In fact, they may be the most financially ambitious generation yet. But when your top goal is paying off debt or launching a risky venture, homeownership (the old-school symbol of financial security) can seem like a distant second.
Still, it doesn’t have to be one or the other. With a few changes in mindset and money habits, Gen Z can chart a path that makes space for both freedom and foundation, for boldness and balance.
Because for this generation, the dream isn’t dead. It’s just waiting on better timing and maybe a better plan.
