In a recent piece for Bloomberg titled “Generation Z Is Getting a Bad Deal on Housing”, economist Allison Schrager explores the contemporary financial strains facing Generation Z (those born from 1997 onwards), particularly in the housing market.
Schrager highlights the age-old struggle of young adults attempting to establish themselves – starting a career, purchasing a home, and often starting a family. This isn’t new in and of itself; every generation seems to insist that they’ve got it tougher than the ones before.
The Millennial generation, armed with the amplifying power of the internet, took this traditional lamentation a step further, claiming not just hardship, but active harm by previous generations. They’ve been vocal in arguing that preceding generations (especially Baby Boomers) had both an easier ride and depleted resources, thus depriving Millennials of opportunities.
Rugged instances of intergenerational ranting and accusations of resource theft are well-documented online. But are these assertions entirely accurate? Not according to Schrager. As she points out, the creation of wealth across generations is not a zero-sum game. Previous generations may have had some advantages, but they also faced distinct challenges, and wealth usually benefits more than just a single generation.
It’s within the housing market, however, that the plight of Gen Z becomes clearer. The previous decade, characterized by ultra-low mortgages, made it possible for millions of millennials to get on the property ladder. These favorable conditions distorted the housing market and will inevitably make it far more challenging for Generation Z to secure properties of their own. The path to homeownership for Gen Z in this new decade appears markedly tougher – an unfortunate inheritance from the decade before.
In conclusion, the struggle to secure financial stability, a solid career, and a home seems to be a universal adult ordeal. But it would seem that, economically speaking, Generation Z has drawn the short straw in comparison to their immediate predecessors when it comes to the housing market. What the resulting impact this will have on Gen Z, the economy, and the housing market, is something we should all keep an eye on.