For 61% of Gen Z Renters, Emotion — Not Financial Security — Drives Homeownership Desires

While owning a home can help build wealth and equity, it comes with its own suite of financial risks. In 2025, the average American household pays $6,934 per year in maintenance and upkeep costs alone, according to Insurify’s most recent analysis.

Homeownership is still the goal for nearly all Gen Z renters. But emotional reasons, not financial ones, motivate them, according to a recent Insurify survey of 1,002 Americans ages 22 to 28, of which nearly half were renters. Starting or supporting a family and the freedom to make a home their own are behind why Gen Z renters want to buy.

But ongoing inflation, burdensome student loan debt, and rising housing costs mean today’s renters are navigating a difficult economic landscape.^[1]

Most Gen Z renters still aim to buy a home, but as the associated initial and ongoing costs increase, this element of the American Dream climbs further out of reach.

Key findings

• Just 28% of surveyed Gen Z renters cited financial reasons as motivation to buy a home: 11% said they want to build equity, 10% said they want to stabilize their housing costs, and 7% want to rent it out to earn passive income.

• Nearly half of surveyed Gen Z renters (43%) expect to try to buy a home within three years, but just 13% could afford a 5% down payment based on the average U.S. home price.

• Financial challenges continue to affect Gen Z renters’ economic mobility: 40% said student loans have made it harder for them to buy a home.

• Gen Z renters are willing to make some sacrifices for a good deal on a home, like living far from friends, family, and amenities. But fewer are willing to live in areas prone to severe weather or violent crime for a lower price.

Gen Z renters want to buy a home to start a family and for the freedom to remodel

Gen Z renters’ homeownership goals have more to do with raising kids than rising rents. Nearly a quarter (22%) of respondents said that starting or supporting a family is why they want to buy a house.

Being able to personalize their space was also a primary motivator: 21% said the freedom to renovate, remodel, or customize their home is why they want to buy.

The sentiment varies by region, the survey shows.

Respondents in the South reported the highest share of family-related reasons: 29% of Gen Z renters said starting or supporting a family was why they wanted to buy a house. And 19% said building generational wealth and passing a home on to their children was the reason. But in the Northeast, just 20% and 12%, respectively, cited those reasons.

The cost of raising a child can vary significantly by location, which may influence Gen Z’s motivations for wanting to own a home.

In New York state, the average annual cost of childcare was $17,743 in 2024, according to an Insurify analysis of data from New York’s Office of Children and Family Services.^[2] In Louisiana, childcare costs $7,098 on average per year, according to an analysis from the Louisiana Policy Institute for Children.^[3] That means New York residents pay about 22% of the state’s median household income for childcare, while Louisiana residents pay 12%.^[4] [5]

Just 10% of respondents nationwide said that stabilizing housing costs was behind their desire to buy a home, while 11% said that building equity was a key motivator. But, while costs vary based on location, Gen Z is reading the writing on the wall.

For many Gen Zers, homeownership is more expensive — and financially risky — than renting

Homeownership does build equity over time, but its many associated costs mean it’s not always within reach for everyone.

The national median asking rent for vacant units was $1,494 per month in the second quarter of 2025, according to the U.S. Census Bureau (USCB).^[6] The median asking price for vacant, for-sale homes was $346,700 during the same period, per the USCB. With 20% down at a 6.61% average mortgage rate, that would be a monthly mortgage payment of $1,773, not including property taxes, home insurance, maintenance, and other costs.^[7]

That math also may not accurately reflect the homes Gen Z are buying and how much they’re putting down. A 20% down payment on a $346,700 home is $69,340, and just 4% of surveyed Gen Z renters could afford a down payment costing $50,000 or more.

The median down payment for first-time homebuyers is 9%, according to a November report from the National Association of Realtors.^[8] If a Gen Z buyer put down 9% on the same house, they’d pay $31,203 up front, a sum just 14% of survey respondents could afford.

Affordability is the primary factor influencing where Gen Z can buy a home, Molly Boesel, senior principal economist at Cotality, told Insurify. North Dakota, Nebraska, and Iowa have the highest share of Gen Z mortgage applicants, according to Cotality data.^[9]

“These markets offer more attainable entry points for young buyers who are just beginning their financial journey and often face challenges like student debt, limited savings, and rising interest rates,” Boesel said. “Gen Z is finding paths to homeownership by targeting cities that offer a balance of affordability and economic opportunity — often far from the traditional coastal hotspots.”

States in the West and Northeast, including California, Hawaii, Massachusetts, and New Jersey, are best represented among the costlier states. Both regions have a higher cost of living, per the Missouri Economic Research and Information Center.^[10]

Several cheaper states, like Louisiana and Oklahoma, have a lower cost of living but face elevated climate risks. While Insurify data shows that climate risks can lead to higher home insurance premiums, properties in Louisiana and Oklahoma, as well as in other states like Alabama and Mississippi, are more affordable than on the coasts.^[11]

Where it’s more affordable to rent vs. buy

Whether renting or buying is the more affordable choice depends on where Gen Z wants to settle, at least for a few years.

If a first-time buyer can put 9% down on a $200,000 starter home and secure a 6.61% mortgage rate, the mortgage payment would be around $1,164 monthly. With home insurance, monthly costs go up to $1,286, according to Insurify data. Add property taxes, and the number lands around $1,433.

Including renters insurance, which costs $18 per month per Insurify data, the median cost of renting is $1,512. On a national level, the monthly cost of renting is a little lower than owning a home, but it can vary significantly by state and region.

Buying an entry-level home in Montana is significantly more expensive than renting. Home values increased 50% between 2020 and 2022. But private sector earnings increased just 7.2% in the same period, according to analysis from the Montana Department of Labor and Industry.^[12]

Also, the more affordable areas of Montana for first-time homebuyers aren’t necessarily the most desirable. For example, the Montana city with the lowest average home value is Glendive, a small and relatively remote city near the North Dakota border, according to Zillow.^[13]

In West Virginia, paying a mortgage can be much cheaper than renting, Insurify analysis shows. Average home values and property tax rates are notably low, which can keep mortgage payments more affordable.

Choosing an affordable location for a first home can bring down costs. But in many states, it means making trade-offs like living in riskier or remote areas.

More than a third (37%) of surveyed Gen Z renters are willing to live far from family or friends for a good deal on a home. Many are also willing to take on a fixer-upper (36%) or live far from amenities (31%) for a lower price.

But most aren’t willing to buy a home in an area prone to severe weather or violent crime — not even for a good deal. And 23% wouldn’t make any sacrifices at all.

94% of Gen Z renters want to be homeowners, but 37% don’t have money set aside for a down payment

Most Gen Z renters want to be homeowners, and many consider this a relatively short-term goal: 43% aim to buy a house within three years, and 65% within six years. But more than a third (37%) of surveyed Gen Z renters don’t have any money for a down payment.

Gen Z plans to afford it by accepting family support and working multiple jobs. Around a quarter of hopeful Gen Z homeowners anticipate ongoing financial support from family to help cover general expenses, according to a May report from BMO Financial Group. Some expect that their family will contribute money toward a down payment.

Nearly a third of Gen Z homeowners said they made a down payment by taking on an extra job, according to a Bank of America report. That number has been increasing since 2023.

Rising rents make saving harder, creating a cycle that further delays homeownership. Student debt also adds to Gen Z renters’ financial burden: 40% said student loans have made it harder to buy a home, according to Insurify’s survey.

“Compared to renting, which typically requires less up-front cash and may offer lower monthly costs, buying a home demands a much deeper financial commitment,” Boesel said. “For Gen Z, many of whom are still building their careers and paying off student loans, the added burden of taxes and insurance can turn a starter home into a financial stretch — or even a nonstarter.”

Tips: How Gen Z can make their American Dream a reality

Buying a home is all about financial readiness, Ryan McCallister, CEO and founder of F5 Mortgage, told Insurify. Whenever Gen Zers want to settle down, homeownership will likely make sense as the safe, long-term option. But he said that for many members of Gen Z, renting just feels safer right now.

“You should make sure that you can afford the mortgage and the other expenses that might come along with homeownership, along with taxes, upkeep, and repairs,” McCallister said. “It is a long-term commitment, and it is not at all something that should be rushed into.”

Learning financial literacy and knowing all the up-front and ongoing costs associated with renting or owning a home can help Gen Z renters determine what’s best for them. Having a reserve account to cover random repairs, unexpected life events, and cost fluctuations in property taxes or home insurance can set new homeowners up well, Alex McLagen, owner of McLagen Home Loans, told Insurify.

“Home prices are at all-time highs, everyday expenses keep climbing, and inflation has outpaced wage growth,” he said. “Even though Gen Z earns more than past generations at the same age, their money doesn’t stretch as far, making it harder to save, buy a home, and build long-term wealth.”

Gen Z renters face unique challenges on the path to homeownership — if it’s a path they choose to walk. While the high initial costs of homeownership may deter some, others may simply value the mobility that renting provides.

“Maybe [Gen Z renters] don’t need — or want — to buy at all,” Whitney Hill, CEO and co-founder of Snap ADU, told Insurify. “We also need to leave room for a changing dream. Homeownership isn’t the only, or even the best, path to financial security. Many Gen Zers value the flexibility of renting, especially as remote work and mobility expand their options.”

Hill said running the numbers backward from operating costs to financing options before starting to shop for a home can help Gen Z start budgeting as if they already own the home.

“Smarter paths forward do exist,” she said. “[H]omeownership isn’t dead for Gen Z, but it needs to be reimagined.”

Methodology

The proprietary data featured in this study comes from an online survey that Insurify commissioned. The survey respondents comprised 1,002 U.S. residents between 22 and 28 years old, including 450 who self-reported as renters. Respondents answered up to 20 questions about their views on renting and homeownership, among other topics. The survey fieldwork took place from June 4 to June 5, 2025.

To determine the monthly cost of homeownership versus renting, Insurify analysts used several datasets: the bottom-tier Zillow Home Value Index, property tax rates by state, proprietary home and renters insurance data, and the Apartment List Rent Estimates.^{[14] [15]}

Insurify’s team of data scientists analyzed millions of home insurance quotes from partner carriers and aggregated rate filings from Quadrant Information Services to determine average home insurance rates. Unless otherwise noted, rates in this report represent the average cost of an HO-3 insurance policy for homeowners with good credit and zero claims within the past five years, covering a single-family frame house with the following coverage limits: $200,000 dwelling, $25,000 personal property, $30,000 loss of use, $300,000 liability, a 5% wind deductible, 2% hail deductible, and a $1,000 general deductible. The 2025 prices reflect rates as of July 2025.

Insurify data scientists analyzed thousands of quotes from more than a dozen national renters insurance companies. Rates span all 50 states and Washington, D.C., and quote averages represent the median price for a given coverage level and geographic area. Unless otherwise specified, quoted rates reflect the median cost for 35-year-old tenants with no prior claims and good credit with a home construction year of 1980. Renters insurance rates represent the average cost of a policy with the following coverage limits: $15,000 personal property, $100,000 liability, $3,000 loss of use, and a $500 deductible.

Annual maintenance and upkeep costs are based on a 2% estimate of the home’s value, in line with industry recommendations of budgeting 1% to 4%.^[16]

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