Why Gen Z Is Choosing Renting Over Buying Homes in 2025

Homeownership has long been considered the epitome of the American Dream, but for many younger buyers, this dream is taking a backseat to other priorities. A recent survey conducted by property management software company Entrata of more than 2,000 Gen Z renters revealed that while owning a home is still a goal for this generation, there are other factors influencing their decisions.

According to the survey, a significant majority of respondents (72%) believe that renting is a better financial option than buying a home. Additionally, 83% of respondents stated that renting allows them to save money for life experiences, indicating a shift in priorities among younger generations.

Affordability certainly plays a role in this trend, as soaring home prices and high mortgage rates have made homeownership unattainable for many young adults. The median home sales price in August was $422,600, with current mortgage rates averaging 6.30%. For Gen Zers who are just starting out in their careers, these costs may simply be out of reach.

However, it’s not just financial considerations driving this shift towards renting. Virginia Love, industry principal at Entrata, suggests that there is a broader cultural shift at play. Younger generations are no longer following the traditional path of high school, college, marriage, homeownership, and children. Instead, they are forging their own paths and prioritizing experiences over material possessions.

One individual who exemplifies this shift is Gabe Cervantes, who decided to forgo homeownership after the COVID-19 pandemic prompted him to reevaluate his priorities. With his job going fully remote and requiring significant travel, Cervantes saw an opportunity to break free from the traditional homeownership model and embrace a more flexible lifestyle.

For many Gen Zers, the question is no longer “when will I buy a home?” but rather, “do I have to buy a home?” The answer, for an increasing number of young adults, is no. Renting allows for greater flexibility, financial freedom, and the ability to prioritize experiences over possessions.

While homeownership may still be a goal for some members of Gen Z, the current economic climate and shifting cultural attitudes are leading many young adults to reconsider the traditional path to adulthood. Renting is no longer seen as a temporary solution but as a lifestyle choice that offers greater freedom and flexibility for a generation that values experiences over material possessions. Additional expenses, such as rising insurance costs, also add to the financial burden of homeownership. These costs, combined with high home prices, create challenges for younger buyers looking to enter the housing market. The median income of Gen Z is $84,000, while younger millennials earn slightly over $108,000, indicating that older generations have a better ability to afford homes in today’s market.

The difference in earning power plays a significant role in determining who can afford to purchase a home. According to the National Association of Realtors (NAR), only 3% of all homebuyers are Gen Z, while younger millennials, aged 26 to 34, make up 12% of all homebuyers.

Renting, on the other hand, presents a more affordable option for many. The average rent in the United States is $1,755, according to RentCafe, making it a more feasible choice for those unable to afford the high costs associated with homeownership.

While many Gen Zers may struggle to afford a home, there are others who are willing to buy but are still exploring different neighborhoods to find the right place to settle. Renting provides these young homebuyers with the flexibility to move from city to city, trying out different lifestyles and locations before making a permanent decision.

For individuals like Aaron Uscilla and his girlfriend, renting has allowed them to test out various cities on the East Coast before settling in the Tampa-St. Petersburg area of Florida. They spent time living in Airbnbs in cities like Arlington, Virginia, and Charleston, South Carolina, to get a feel for the different locations before making a final decision.

Similarly, individuals like Cervantes are taking their time to explore different cities, using services like Landing to secure fully furnished, all-inclusive rentals that offer flexibility and convenience. By moving every few months and immersing themselves in new experiences, they are able to find the right place to call home without the commitment of homeownership.

Ultimately, the rising costs associated with homeownership, such as insurance and high home prices, are making it difficult for younger buyers to enter the housing market. Renting provides a more affordable and flexible option for those who are still exploring different neighborhoods and searching for the perfect place to settle down. By taking their time to explore and experience different locations, these individuals can make informed decisions about where to ultimately call home.