The avocado toast and coffee excuse as to why younger generations can’t afford a home is perhaps a bit outdated—and inaccurate.
Of the roughly 70% of millennial and Gen Z renters who struggle to afford their regular housing payments, several of them are sacrificing luxuries in order to afford their housing, according to a recent survey from Redfin.
“Many Gen Zers and millennials are making real sacrifices—picking up side gigs, selling their possessions, even delaying doctor’s appointments—just to pay for the basic need of housing,” said Daryl Fairweather, Redfin’s chief economist. “With the cost of buying a home rising much faster than wages, people without access to family money are much more likely to struggle to pay for housing, which could widen the gap between the haves and the have-nots in the future.”
Most notably, 40% of struggling younger folks are frequenting restaurants less often. The second-most common sacrifice, at 31%, was taking fewer vacations, or skipping them entirely.
Still significant, 27% of millennials and Gen Zers struggling with monthly rent payments reported borrowing money from family or friends, while 25% picked up extra work shifts.
While some young renters visited restaurants less often, 22% reported skipping meals entirely in order to afford rent. Almost a quarter (22%) reported selling their belongings, and 19% delayed medical treatments.
With affordability as a high-stakes crisis for housing, and younger generations particularly struggling under student loan debt and cost of living increases, the trajectory of millennials and Gen Z has huge implications for both the long- and short-term health of real estate markets. A recent analysis by Harvard’s Joint Center for Housing Studies projected a significant dip in homeownership rates if the young people continue to face these same struggles.
But even young folks who do manage to buy a home are facing obstacles. Redfin, looking at Gen Z and millennial homeowners, found 41% struggle to make their regular mortgage payments. The interesting difference between owners and renters, per the survey, is that homeowners are more likely to sacrifice luxuries and less likely to sacrifice necessities.
Compared to the 40% of renters who reduced their restaurant outings, 43% of homeowners ate out less. More than a third (36%) of owners took fewer or no vacations compared to the 31% of renters.
Additionally, 11% and 13% of owners reported skipping meals and delaying medical treatments, respectively, to make their mortgage payments, compared to 22% and 19% of renters.
