For Gen Z, Owning A Home Isn't Just A Dream – It's The Blueprint For Wealth

Most of Gen Z believe owning a home is essential for building wealth.

According to a survey from real estate investment platform Arrived, 87% of Gen Z – those between ages 19 and 26 – said homeownership is a key strategy for wealth building and 65% say owning a home is personally important to them.

However, according to the National Association of Realtors (NAR), Gen Zers account for only about 3% of homebuyers.

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"These young buyers are tiptoeing into the housing market," said NAR's deputy chief economist Jessica Lautz.

Rising costs, particularly in the housing market, present significant obstacles for younger Americans striving to achieve their financial goals. When surveyed, 80% of Gen Z respondents identified high home prices as the primary barrier to entering the housing market.

The sentiment is understandable. According to the Federal Reserve Bank of St. Louis (FRED), home prices have surged by 58.7% since the oldest members of Gen Z reached adulthood in 2014.

The pandemic exacerbated the trend, with housing prices skyrocketing. Between 2020 and 2021, the median home sales price increased dramatically by $52,667, significantly outpacing the median worker's annual earnings of $50,000. The surge was even more pronounced in some markets, with prices escalating by over 50% within just two years.

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While the pandemic-induced pressures, such as increased demand and building supply shortages, have begun to ease, the housing market has not fully cooled down. As of the third quarter of 2024, the median sales price of a house was $420,400, according to FRED. The figure underscores the ongoing challenges many younger Americans face when seeking to enter the housing market.

While the traditional path to homeownership may seem out of reach for many Gen Zers because of the high costs involved, fractional real estate ownership presents a potentially more accessible route to building wealth in the property market.

"Coming of age amid skyrocketing home prices and pandemic-era economic turbulence has given some of Gen Z financial whiplash, particularly when it comes to owning a home," said Cameron Wu, vice president of investments at Arrived.

"There's this common perception that owning a home is not something young people can do. This is one of the key reasons we launched Arrived: to create ways for people to invest in real estate at any price point. And it's working – 58% of Arrived users born after the year 2000 get started with an investment of just $100, helping them grow their wealth and invest in real estate without having to scrimp and save for a down payment that gets more expensive with every passing year."

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Arrived Achieved A Total Return of 34.7% On Their Biggest Sale Yet — Diversify Your Monthly Income Stream With Fractional Real Estate

Arrived allows individuals to invest in shares of rental properties for as little as $100, providing the potential for monthly rental income and long-term appreciation without the hassles of being a landlord. With over $1 million in dividends paid out last quarter and a growing selection of properties across various markets, Arrived offers an attractive alternative for investors seeking to build a diversified real estate portfolio. 

In October 2024, Arrived sold The Centennial, achieving a total return of 34.7% (11.2% average annual returns) for investors. Arrived aims to continue delivering similar value across our portfolio through careful market selection, attentive property management, and thoughtful timing in sales.

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