Gen Z isn’t giving up on homeownership—they’re just taking radically different paths to get there. From co-buying with friends to strategic multi-generational living, young adults are rewriting the rules of the American Dream.
Here are 5 interesting trends to know about:
- Only 26% of adult Gen Z members owned homes in 2024, compared to 40% of baby boomers at the same age.
- According to some surveys, more than 60% of Gen Z adults now live in multigenerational households, up from 33% of boomers.
- An estimated 25% of all homes sold involve co-buyers, with 14% purchasing with friends.
- Multi-generational home purchases increased to 17% of all buyers in 2024, up from 14% the previous year.
- Co-buying requires careful legal structures (joint tenancy vs. tenancy in common) and detailed co-ownership agreements.
What You’ll Find in the Rest of This Guide
- Traditional path to homeownership is broken
- Strategy #1: Living with the parents
- Strategy #2: Buying a house with friends
- Strategy #3: Renting with roommates
- Strategy #4: Non-traditional property types
- What it all means for the housing market
- Tips for Gen Z home buyers in 2026
Traditional Path to Homeownership Is Broken
For decades, the path to homeownership seemed straightforward. Graduate from college, get a job, save for a down payment, and buy your first home in your mid-to-late twenties.
But for Generation Z (born between 1997 and 2012) this timeline has become nearly impossible to follow.
Nearly half of Gen Z potential buyers say high home prices prevent them from purchasing, while 75% report that rising living costs make it impossible to save enough for a down payment.
The median home price in the U.S. increased by roughly 90% over the past decade, or about 6% each year. During that same period, wages for full-time workers increased by only 0.6% annually.
Student debt adds another layer of complexity. Typical student loan debt among graduates remains in the $30,000 to $40,000 range.
With these numbers, saving for a traditional 20% down payment (which would be about $72,000 on a median-priced home) becomes an enormous challenge.
But here’s what the headlines often miss…
Gen Z isn’t giving up on homeownership completely. Instead, they’re finding creative alternatives that redefine what buying a home should look like.
Strategy #1: Living With the Parents
About 1.5 million more adults under 35 live with their parents today than a decade ago—a 6.3% increase that’s more than double the growth rate of the under-35 population overall.
But this isn’t your parents’ version of “living in the basement.”
Today’s multi-generational living arrangements often involve strategic financial decisions, rather than a setback or failure.
Young adults who live at home can pay below-market “rent” to their parents while building up a down payment fund. Some save several hundred dollars monthly, money that would otherwise go to a landlord with nothing to show for it.
The stigma around adult children living at home is also decreasing.
According to recent data, 59% of Gen Z adults currently live in multigenerational households, compared to 56% of millennials and just 33% of baby boomers.
This shift reflects changing cultural attitudes about family and independence.
How Families Are Making It Work
Successful multigenerational living often requires adjustments and planning. Many families are renovating homes to create more privacy.
Common renovations include:
- Adding accessory dwelling units (ADUs) or in-law suites
- Finishing basements with separate entrances
- Converting garages into studio apartments
- Installing second kitchens for independent meal preparation
According to the National Association of Realtors, 17% of home buyers in 2024 purchased multigenerational homes, up from 14% the previous year.
Buyers specifically look for homes with features like first-floor bedrooms, accessible bathrooms, and flexible floor plans that can accommodate multiple generations.
The financial benefits of this arrangement go far beyond rent savings. In many scenarios, grandparents help with childcare while adult children assist with home maintenance or elder care.
Twenty-seven percent of multigenerational home buyers say grandparents contribute financially, often enabling the family to live in a better area or afford a larger home.
Strategy #2: Buying a House with Friends
One of the fastest-growing trends in homeownership is friends buying property together.
An estimated 25% of all homes sold in 2021 involved co-buyers, and that percentage continues to rise. According to Zillow, 14% of buyers co-purchased with a friend, while 12% bought with a relative other than a spouse.
The math makes sense. Two incomes can significantly increase buying power, shortening the path to homeownership by years. Splitting a down payment can save tens of thousands of dollars upfront—a key consideration when a typical down payment can exceed $40,000.
Understanding the Legal Structures
When friends buy a home together, they have to decide how they want to structure the ownership. The two main options are:
1. Joint Tenancy
In joint tenancy, each owner has an equal share of the property. This comes with “right of survivorship,” meaning if one owner dies, their share automatically passes to the surviving owner (not to their heirs). Any major decisions about the property require agreement from all owners.
2. Tenancy in Common (TIC)
In a TIC scenario, owners can have unequal shares based on their financial contributions. For example, if one person contributes 60% of the down payment and another contributes 40%, ownership can reflect those proportions.
Unlike joint tenancy, each TIC owner can pass their share to heirs through a will. Owners can also sell their share without the other’s approval—though finding a buyer willing to accept partial ownership can be difficult if not impossible.
The Importance of Co-Ownership Agreements
Real estate attorneys often recommend creating a co-ownership agreement before co-buying a home with a friend. This legally binding document should address:
- Exact ownership percentages
- How much each person contributes to the down payment
- Division of monthly mortgage payments, property taxes, insurance, and utilities
- Who handles maintenance and repairs
- How decisions about renovations or major expenses are made
- What happens if one person loses their job or can’t pay their share
- Exit strategies if someone wants to sell
- Dispute resolution processes
Financial hardship, life changes, or disagreements about house rules can turn a good arrangement bad quickly. A co-ownership agreement can help avoid such problems.
Some experts recommend living together as roommates for at least a year before co-buying to ensure compatibility.
Strategy #3: Choosing to Rent With Roommates
Not every alternative involves ownership.
A growing number of Gen Z adults are choosing to rent with roommates well into their thirties—not because they can’t afford to buy, but as an intentional strategy.
The rise of co-living spaces reflects this shift. These are purpose-built developments that offer private bedrooms with shared common areas, often with amenities and social events included.
Co-living housing units are mainly designed for working professionals who want community without sacrificing privacy.
Why Some People Choose to Keep Renting
The math on renting versus buying isn’t always simple.
While homeowners can build up equity in their homes, they also have to pay:
- Property taxes (which continue to rise)
- Homeowners insurance (up 8% in 2026 according to forecasts)
- Maintenance and repairs (typically 1-3% of home value annually)
- HOA fees in many communities
Renters, on the other hand, have more flexibility to move for job opportunities, to change neighborhoods easily, or to downsize when needed. For Gen Z workers in fields that require mobility, this kind of flexibility can lead to higher earnings over time.
But there’s a trade-off. Renters don’t build home equity, which historically has been a major source of wealth building for American families. Homeowners have about 40 times the wealth of renters on average.
Bottom line: For those prioritizing career growth and life flexibility in their 20s and 30s, delayed homeownership might be the smartest choice.
Strategy #4: Non-Traditional Property Types
When traditional single-family houses feel out of reach, some Gen Z home buyers are exploring unique alternatives that previous generations might have overlooked.
1. Manufactured Homes
The stigma around manufactured homes is slowly breaking down. Modern manufactured homes bear little resemblance to older mobile homes. They’re built to government standards and can be placed on permanent foundations.
They also cost significantly less than site-built homes—often 30-50% less for comparable square footage. This is a big selling point for Gen Z buyers on a tight budget. Research also shows that manufactured homes appreciate similar to traditional housing.
The catch is financing. Manufactured homes can be harder to finance than traditional homes, with fewer lenders offering mortgages and higher interest rates. But this could change in the future, if more home buyers seek out these properties.
2. Tiny Houses and Micro-Living
The tiny house movement gets significant social media attention, but the reality is more complex than what you might see on Instagram.
While tiny homes (typically under 400 square feet) cost much less than traditional houses, finding legal places to park or build them is challenging.
Zoning laws in most cities don’t accommodate tiny houses. Many jurisdictions have minimum square footage requirements for permanent dwellings. RV parks may not allow permanent residence. This means tiny house owners often live in a legal gray area.
Some cities are beginning to create tiny house communities and adjust zoning, but these remain the exception rather than the rule.
3. Housing Cooperatives and Community Land Trusts
Housing cooperatives offer another alternative to traditional single-family homes.
Instead of buying a specific unit, residents buy shares in a corporation that owns the entire building. Monthly fees cover the mortgage, taxes, insurance, and maintenance for the whole property (not just their unit).
Co-ops typically cost less than condominiums and give residents a bit more control over their community. The downside is that co-op boards can be picky about who they allow to buy in, and selling shares can take longer than selling a condo or house.
Community land trusts separate the cost of the building from the cost of the land, making homes more affordable. The trust owns the land and leases it to homeowners long-term, often for 99 years. This keeps homes affordable across generations but limits the amount of equity homeowners can build.
Do These Alternatives Actually Build Wealth?
Gen Z home buyers should also consider whether or not these alternative paths contribute to wealth building and long-term financial security.
The Equity Question
Traditional homeownership builds wealth in several ways.
- The portion of your mortgage payment that goes to principal is essentially forced savings.
- Home values typically appreciate over time, allowing owners to build equity.
- And homeowners benefit from leverage, using borrowed money (mortgage) to control an asset that can grow in value.
None of the rental strategies build equity.
Living with parents or renting with roommates is financially advantageous only if you invest the money you save. A Gen Z adult who saves $1,000 monthly by living at home for three years and invests it wisely could accumulate $40,000-45,000, enough for a down payment.
Co-buying with friends builds equity just like traditional homeownership, but with added complexity. When it’s time to sell, all owners must agree, or someone must buy out the others.
Tax Implications to Consider
Co-ownership can complicate taxes as well. If owners hold property as tenants in common with unequal shares, they need to track expenses carefully.
Mortgage interest deductions must be divided based on ownership percentages. Capital gains taxes when selling also depend on ownership structure and whether the property was a primary residence for all owners.
Property transferred to heirs has different tax implications under joint tenancy versus tenancy in common. Anyone considering co-buying should consult a tax professional before purchasing.
What It All Means for the Housing Market
These shifting patterns are already reshaping the housing market, and in several ways.
Changing Housing Demand
Developers are responding to multi-generational living trends by building homes with:
- Multiple primary suites
- Two separate living areas within one home
- Larger floor plans with more bedrooms
- Ground-floor bedrooms for aging relatives
- Homes designed for ADU additions
The “built-for-rent” single-family home sector has exploded, with over 100,000 units delivered in 2024 alone. These are single-family homes built specifically for rental, not sale—a direct response to Gen Z and millennial buyers being priced out of ownership.
Policy Implications
These trends also raise questions about housing policy. Should governments:
- Provide more first-time buyer assistance programs?
- Make it easier to build ADUs and multi-generational homes?
- Create new mortgage products for co-buyers?
- Address zoning laws that make alternative housing difficult?
Some states are already acting. California has streamlined ADU permitting. Other states are considering co-buying protections similar to renter protections.
Tips for Gen Z Home Buyers in 2026
Gen Z home buyers can use several strategies to improve their chance of success.
- If living with parents: Have clear conversations about financial contributions, house rules, and timelines. Open a dedicated savings account for your future down payment. Set concrete goals so it’s a stepping stone rather than a permanent situation.
- If co-buying with friends: Hire a real estate attorney to draft a comprehensive co-ownership agreement. Make sure you’re financially and personally compatible. Live together first if possible. Plan for exit strategies from the beginning.
- If choosing to rent longer: Invest the difference between rent and what you’d pay in housing costs if you owned. Build your credit score and save consistently. Stay informed about your local market so you can act when opportunities arise.
- If exploring alternative properties: Research thoroughly before committing. Understand zoning laws, financing options, and resale prospects. Make sure the cost savings justify the trade-offs.
Ending on a Positive Note
These alternative paths to homeownership show something important about Gen Z: they’re pragmatic problem-solvers. Faced with higher housing costs and other challenges, they’re not waiting for perfect conditions—they’re creating solutions.
The definition of homeownership success is changing. It’s no longer necessarily about buying a single-family home at 28 with a white picket fence.
For many Gen Z adults, success might mean:
- Co-owning a starter property with friends at 30
- Living with parents while building substantial savings
- Choosing a smaller home or different area to make ownership possible
- Delaying ownership to invest in education and career growth
The housing market will eventually adapt to these trends. In the meantime, Gen Z is proving that the American Dream is flexible enough to survive. It just looks different than it did for their parents.