Gen Z is falling behind on the path to homeownership. In 2025, they made up just 3% of all homebuyers, according to the National Association of Realtors®, the smallest share of any generation and a sharp contrast to baby boomers, who accounted for 42% of buyers.
While high interest rates and higher home prices have made it harder for young adults to break into the market, new research suggests another force might be working against Gen Z: how they manage their money.
According to PYMNTS Intelligence, a payments data provider, despite valuing homeownership, Gen Z’s top financial goal isn’t buying a home. It’s paying off debt.
The average Gen Z adult carries an average of $94,101 in personal debt, with credit card debt being the most common.
With so much of their income tied up in monthly payments, even high earners in this generation are struggling to save for a down payment or qualify for a mortgage. Debt, not disinterest, might be the real reason Gen Z is falling behind—at least for now.
“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, 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.”
The 2 financial personas and where Gen Z fits in
PYMNTS Intelligence identifies two key money management mindsets:
- Planners, who proactively save and pay off credit cards
- Reactors, who handle bills as they come and often rely on credit or loans
Gen Z overwhelmingly falls into the latter group. A striking 73% of Gen Zers are classified as reactors, making them more likely to live paycheck to paycheck, carry high-interest debt, and struggle to build savings. That reactive approach can seriously undermine major financial goals, like buying a home, because it prioritizes short-term survival over long-term stability.
Even more surprising, the reactor mindset is gaining ground among high earners across generations. Since February 2024, the share of six-figure earners who identify as planners has dropped by 25%. Now, 52% of top earners are reactors, a shift that underscores how widespread short-term financial thinking has become, even among those typically viewed as having the means to plan ahead.
Risk over security: The Gen Z money mindset
Unlike baby boomers, 54% of whom are planners focused on long-term stability, Gen Z is chasing growth. According to the PYMNTS report:
- Just 7.7% of Gen Z cite retirement saving as a top financial priority, compared with 22.1% of baby boomers.
- Nearly 7% of Gen Z say their No. 1 goal is starting a business, making them eight times more likely than boomers to focus on entrepreneurship.
“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.
While starting a business can lead to long-term wealth, it typically comes with short-term financial instability, exactly what makes it harder to qualify for a mortgage or build up a down payment.
Irregular income, high credit utilization, and limited savings make it much harder to qualify for a mortgage under traditional lending models. Even high-earning Gen Z entrepreneurs might struggle to demonstrate the consistent income or financial reserves lenders expect.
This risk-oriented mindset might be a reaction to the current conditions of the housing market. Buyers now need to earn 70% more than they did just six years ago to buy a home, to say nothing of the difference between buying a house now than in the 1960s and ’70s, when many baby boomers bought their first homes. These conditions have made many in Gen Z feel that shooting for the moon in business is a more realistic goal than saving for that white picket fence.
Why buying a home is still a priority—just not the first one
Homeownership hasn’t fallen off Gen Z’s radar, but it’s taking a back seat to paying off existing debt. Buying a house ranks as this generation’s second most important financial goal, with 14.1% of Gen Zers ranking it as a priority.
But deprioritizing homeownership, even temporarily, can come at a long-term cost. In a market where prices keep climbing, every year spent focusing elsewhere can make the eventual buy-in more expensive. And because lenders heavily weigh savings, credit usage, and income consistency, Gen Z’s current financial behaviors—like revolving debt and low reserves—can delay homeownership even further, regardless of intent or income.
In other words, Gen Z still wants to own, but the reactive financial path they’re following makes it harder to get there. Without a shift in priorities, many might find themselves stuck in a cycle where the dream of owning a home never quite catches up to their ambition.
What Gen Z can do differently
To bridge the gap between ambition and ownership, Gen Z might need to rethink how they prioritize and manage their money. The good news is that paying off debt, Gen Z’s top financial priority, will eventually help them buy a house by lowering their debt-to-income ratio.
The area where they can make the biggest changes, though, is in moving from a reactive mindset to a planning mindset. Here’s how they can get started:
- Automate savings to gradually build up a down payment.
- Track spending patterns to identify areas to cut back.
- Use credit strategically, aiming to pay in full each month.
- Pursue both goals in parallel—treat debt repayment as a priority, but not at the cost of building a safety net to support future homeownership.
Gen Z hasn’t turned away from homeownership, but when the top priority involves risk or volatility, it can make the second one harder to reach. With the right habits and tools, Gen Z can build both the freedom to pursue big dreams and the foundation to one day own a piece of them.
