Gen Z Grasps at the American Dream of Homeownership but Struggles With Nihilistic Spending

Gen Z is coming of age in a high-inflation economy and in the midst of what many — so far, incorrectly — believe to be a recession.

COVID-19 and its accompanying economic disruption marred at least part of Gen Z’s educational experience. In a recent Insurify poll, 23% of Gen Zers said they feel unable to plan their future because they’re not sure what their finances will look like.

Despite the challenging economy, many Zoomers are optimistic about their future finances. In the same poll, 43% of Gen Zers said they’re hopeful their financial situation will improve.

That said, the so-called “Silent Recession” reflects a mismatch between Americans’ feelings about financial hardship and traditional economic metrics, like unemployment rates or the stock market performance. While the U.S. narrowly avoided a recession in 2023, 56% of Americans wrongly believe we’re in one, a Harris poll conducted for The Guardian found.^[1]

Economists haven’t ruled out the possibility that they’ll soon be right.

Many Gen Zers cope with uncertainty by embracing optimistic nihilism — a philosophy that acknowledges life’s absurdity and challenges people to create their own meaning in a meaningless world.

The philosophy’s core tenets of pragmatism and radical acceptance may also help Gen Z adapt to drastic changes, from pandemic lockdowns to AI-related layoffs, and achieve their version of the American dream.

Insurify’s data science team analyzed rising insurance costs and surveyed more than 1,000 22- to 27-year-olds to find out what inflation and recession fears mean for Gen Z’s upward mobility and homeownership goals.

Key Takeaways

• Gen Z women are more hopeful about future finances (44%) than men (40%) — but young women (12%) are also more likely to feel angry about barriers to their financial success than men (10%), Insurify’s survey found.

• Among Zoomers who want to own a home, 13% said they don’t think they’ll ever be able to afford it. An additional 5% who don’t want to be homeowners said they’ll never be able to afford it anyway.

• Nearly half (48%) of Gen Z rank housing costs as their most stressful expense. The cost of home insurance has increased by nearly 20% over the past two years, and Insurify projects average annual premiums will hit $2,522 by the end of 2024.

• More Gen Z men think they’ll purchase a house by themselves than their female peers, with 40% saying they plan to buy a home solo compared to 28% of women.

• TikTok is the second-largest source of financial advice for Zoomers, according to an Insurify survey. Gen Z women (26%) turn to the platform for advice more often than men (15%) do. 

• Concerningly, TikTok may encourage more spending. Gen Zers between 18 and 24 are 3.2 times more likely to buy something on TikTok Shop than the average shopper, according to a case study by the market insights company Earnest Analytics.^[2]

• Car expenses are a top cause of stress for 30% of Gen Zers, according to an Insurify survey. Insurify data shows that Gen Zers between 18 and 27 pay an average of $2,865 per year for full-coverage car insurance — 23% more than the national average of $2,329.

Gen Z faces inflation and fears of an economic downturn

Though 43% of Gen Z feel optimistic about their future finances, present-day expenses still cause stress. Housing costs are the most stressful expense for Gen Zers, with 48% of Insurify survey respondents listing it among their top three concerns. Grocery costs stress out 38% of Gen Z, and debt payments and car expenses stress out 32% and 30%, respectively.

The typical monthly rent price was $1,952 at the start of 2024 — a 35% increase from $1,441 in January 2019, according to Zillow. Homeowners face average annual home insurance premiums of $2,377, up by nearly 20% since 2021, according to Insurify data.

Car expenses are on the rise too, with the average cost of a new vehicle surpassing $48,000 and car insurance costs increasing a projected 7% in 2024, following a staggering 24% hike the prior year.^[3] As younger, riskier drivers, Gen Zers already pay 23% more for insurance than the U.S. average, and about one-third of survey respondents saw rate hikes in the last year.

Likewise, food prices have increased by 25% since the onset of the COVID-19 pandemic, according to a Purdue University report.^[4]

Inflation shows signs of slowing, with the Consumer Price Index for All Urban Consumers (CPI-U) increasing 3.4% year-over-year in April 2024, compared to 3.5% the prior year, according to the Bureau of Labor Statistics (BLS). But that tiny decrease was the first time year-over-year inflation declined in 2024.

Gen Z embraces ’90s financial advice with a transparent twist

TikTok — specifically financial TikTok, or FinTok — is the second most popular source of Gen Z financial advice. Insurify asked Gen Zers to choose up to two main sources of advice in a survey, and 22% of Zoomers indicated the app was one of their top ways to find information.

Gen Z women (25%) are much more likely to seek financial advice on TikTok than their male peers (16%). Younger Gen Zers also turn to the app more often, with 26% of 22- to 24-year-olds listing the platform as one of their top sources for advice, compared to 18% of 25- to 27-year-olds.

Only parents and other knowledgeable relatives (41%) beat out the video-sharing platform, which explains why so much of the financial advice on TikTok sounds like it came straight out of the ’90s — with a notable Gen Z twist.

For many Americans, money (along with politics and religion) isn’t something you discuss in polite company. Not so for Gen Z, who broadcast every expense on social media as part of the “loud budgeting” trend. Once-stigmatized conversations about money troubles are now content fodder, racking up views and comments from peers who feel similarly squeezed by inflation.

The transparency is new, but Gen Z’s financial advice shares a pragmatic approach found in popular personal finance books that their parents may have read in the 1990s.

“Whatever your income, always live below your means” is the fundamental rule of wealth building, according to John T. Stanley’s 1996 bestseller “The Millionaire Next Door.” Curb your spending, save aggressively, track your expenses, and you’ll find financial freedom, both ’90s books and present-day influencers promise.

Lillian Zhang, a 24-year-old content creator and product marketing manager in the tech industry, gives her 111,000 TikTok followers similar advice in a video about things that “keep you broke” in your 20s. Zhang cautions against living beyond your means, using buy-now-pay-later (BNPL) services like Klarna and Afterpay, and taking money out of savings for unnecessary purchases.

Working multiple jobs or side hustles to earn extra money for savings is also part of the Gen Z ethos.

“Most of my friends have multiple things going on,” said Zhang, who makes about half her income from her day job and half from content creation. After the financial planning app Mint shut down, Zhang saw an opportunity for a new income stream and began selling financial trackers to help her audience stay on top of their goals.

Gen Z and doom spending: ‘The economy is so screwed, what’s the point of saving?’

Zhang has been interested in personal finance since middle school. Running a small business selling plush toys gave her “a sense of what it’s like to make my own money and the value that dollar held.”

But Zhang says not all of Gen Z is so frugal. “There is a sentiment that I’ve seen on TikTok where a lot of Gen Zers are like, ‘The economy is so screwed, what’s the point of saving?’”

Gloria Garcia Cisneros, a 27-year-old certified financial planner and wealth advisor with LourdMurray, says she’s noticed the same trend. Global conflicts, the state of the U.S., and environmental concerns are at the top of young people’s minds, influencing their approach to finances.

“They go into this doom spending,” said Cisneros, describing a phenomenon of impulse buying fueled by existential anxiety. “We tend to be in the moment and let emotion drive us, but if we take a step back, we see that there have been world wars and the Great Depression that we’ve lived through. … Even in these horrible worst-case scenarios, [markets] recover. I try to give [Gen Z clients] context.”

Rather than giving into financial anxiety, Cisneros thinks throwback advice could be a winning strategy for Gen Z.

“What was being said in the ’80s or ’90s wasn’t based on virality. It was based on what was passed down to you, and it’s how the older generations built wealth, which is simple. It’s just consistency, discipline, and small habits. That rings true, and if you stick to those basics, then you’re going to do well.”

Gen Z homeownership outpaces parents, but 18% say they’ll never be able to afford it

About 79% of Gen Zers plan on purchasing a home in the future, and 63% want to buy in six years or less. Plus, 41% are aiming for three years or less. Despite this hopeful outlook, Gen Z homebuyers might have a harder time than Millennials, who benefited from record-low interest rates of 2.65% in 2021.

Affordability is still a major barrier, with 13% of Zoomers saying they want a home but don’t think they’ll ever be able to afford one. Another 5% don’t want to be homeowners and don’t think they could afford it anyway.

While Gen Z’s homeownership goals are ambitious, they’re on track to achieve them. In 2022, 30% of 25-year-olds were homeowners, compared to 27% of Gen Xers and 28% of Millennials when they were the same age, according to a Redfin study.^[5]

Some Gen Zers feel they missed their opportunity to get a foot on the property ladder, with 30-year mortgage rates now hovering around 7%, according to Freddie Mac. But the decreased competition among homebuyers can work to their advantage.

Brian Joseph, a 26-year-old property owner from New York City, bought a home in late 2022 after the housing market had cooled.

“The place I got ended up being an absolute steal because the property values have risen since I bought it,” says Joseph, who paid about $170,000 for a roomy one-bedroom apartment in a well-maintained co-op building.

Joseph had always considered homeownership a distant dream until the pandemic caused major shifts in his career and finances. In college, he started seriously collecting sneakers, amassing 300 pairs.

“I worked part-time jobs. I ate Wendy’s 4 for 4s and had no money — overdrawn accounts and maxed-out credit cards — but I had a hell of a lot of shoes.”

While his peers invested in cryptocurrency and experimented with stock trading, Joseph honed his expertise in the market he best understood: luxury goods.

“I knew what size ranges would sell better than others, and specific models. I knew the market very, very well.” He tracked his savings journey on the social messaging platform Discord.

After he graduated (“over YouTube livestream, really depressing”), Joseph lived with his parents and worked a part-time job, making about $25,000 per year.

Pandemic-era stimulus checks helped Joseph pay off some credit card debt, and an “existential crisis” motivated him to sell the majority of his sneaker stock, valued at a total of $70,000. “I sold about $40,000 worth of sneakers, and I didn’t have to pay taxes on any of it because they weren’t taxing reselling at the time.”

Joseph had saved more than $20,000 from reselling sneakers when he found the right property, but he was still short of what he needed. His parents pitched in $15,000 toward the down payment — an increasingly common situation as more developers and cash buyers push first-time homebuyers out of desirable markets.

Family assistance helped Joseph buy at the right time so he could cover minor renovations, like painting and updating fixtures, with his later resale earnings.

Today, Joseph works full-time in corporate luxury goods and earns a salary of about $62,000. But his sneakerhead side hustle gave him a path toward financial stability. With a property secured, he now pays about $1,500 monthly to live by himself in the most expensive city in the U.S.

Still, Joseph isn’t immune to rising housing costs. Insurify projects New York’s average home insurance premium will increase by 6% this year and surpass $2,400 by the end of 2024.

Gen Z men are 43% more likely than women to think they’ll buy a home alone

Zoomers have a sizable gender gap when it comes to their ideas about independent homeownership. Gen Z men are about 43% more likely than their female peers to plan on purchasing a home alone, with 40% saying they’ll buy on their own compared to 28% of women.

Income differences likely contribute to men’s greater interest in solo homeownership. American women earn about 84 cents for every $1 men earn, according to BLS data. The Maxwell Single Women Home Buyer Report backs this up, finding that 60% of single women mortgage applicants earn less than $100,000 per year, compared to 42% of single men applicants.^[6]

“I think the gender pay gap affects us dramatically,” says Cisneros, who notes minor differences in entry-level paychecks can add up over time. “If you’re at the same job for 10 or 20 years, that first salary is going to affect every pay bump and promotion [based on percentage], so it could compound to hundreds of thousands of dollars over the course of your career.”

Women who plan on having children might also be more cautious about buying a home on their own because they may not have income during their leave, says Cisneros.

But homebuyer demographics are changing, and young women are leading the charge, according to Maxwell’s report. Eighteen- to 24-year-olds account for 20% of single female mortgage applicants, and 25- to 34-year-olds comprise another 35%.

Zhang is among the 28% of Gen Z women who plan to buy independently. “Since I grew up here and my entire life is rooted in the Bay Area, I would like to buy a home [here], ideally. Right now, the plan for the foreseeable future is to do it by myself — no family support, no significant other.”

Zhang mainly wants to buy a home to build equity — a reason 9% of Gen Z shared in Insurify’s survey. Philly Home Girls Realtor© Kate McCann frequently hears this goal from her young clients.

“A lot of young women don’t feel like traditional ways of investing are super accessible to them. Most of the young women I work with see [buying a home] as their way to get some generational wealth going or have a house as a kind of savings account,” says McCann.

Gen Z wants a home to start a family, but some are tired of waiting

More than half of Gen Zers that Insurify surveyed said the main reason they want to buy a home is for their family. “To start or support a family” (31%) was the most popular response, followed by “To build generational wealth” (22%). One-quarter of Gen Z women are concerned with building generational wealth compared to 16% of their male peers.

As starter homes become increasingly unaffordable, young homebuyers are relying more on family financial support. Thirty-six percent of Gen Zers and Millennials who plan to buy a home in the near future expect a cash gift from their family to help fund their down payment, a Redfin survey found.^[7]

Single young women don’t always receive the same level of support, says McCann. “I tend to see young couples getting help from family more than single people. … When some of these younger women are buying houses for the first time, a lot of parents hold back. They maybe want to give [financial help] as a wedding gift.”

But many Gen Z buyers aren’t waiting for a wedding.

“A lot of women are saying, ‘Well, I don’t have a life partner yet, so let me just buy a home and have some security,’” said McCann. If they partner up with another homeowner later, they can rent a property or sell one for an influx of cash. “I think it opens up a lot of possibilities, whereas maybe my parents’ generation would see it as messy or more complicated.”

Gen Z fights impulse spending amid a deluge of online ads

“People in industrialized nations used to be called ‘citizens.’ Now we are ‘consumers,’” Vicki Robin and Joe Dominguez wrote in their prescient 1992 personal finance bestseller “Your Money or Your Life.”

Gen Z FinTok discourages impulse spending, but that’s not deterring the 15.3% of Zoomers who the Federal Reserve Bank of New York says have maxed out their credit cards.^[8]

Gen Zers use more credit than Millennials did at the same age, a 2024 TransUnion report studying 22- to 24-year-olds found. Eighty-four percent of Gen Zers had a credit card in 2023, compared to 61% of Millennials in 2013. Auto loan usage is also higher, at 30% for Gen Z compared to 25% for Millennials.^[9]

Cisneros thinks credit cards can be a good way to build credit but worries that Gen Zers don’t fully understand how quickly interest and fees can add up. Zhang uses credit cards for travel perks and cash back incentives but advises her followers to treat them like debit cards and pay off the balance each month.

Zoomers have higher delinquency rates on auto loans and credit cards than Millennials — but Millennials beat Gen Z on personal and student loan delinquency.^[10]

Compulsive buying increased during the COVID-19 pandemic, likely as a response to increased psychological distress, a 2022 study from Humboldt University of Berlin found.^[11] Amazon, the largest online retailer, increased year-over-year sales by 29% in the second quarter of 2020. A few years later, Amazon rolled out a fleet of delivery vans with the slogan “Warning: Contents may cause happiness.”

“Temptation and fear of missing out is a big thing for me. A lot of these brands have conditioned us to feel like we need to have it,” said Joseph, who’s currently paying off more than $10,000 in credit card debt. The constant barrage of targeted ads and sponsored content online makes it “really hard to say no to yourself sometimes.”

Both Zhang and Cisneros caution against using BNPL services, which Cisneros says are “huge” among Gen Zers. “They don’t have the money to live the lifestyle they want, and they’re trying to live a highlight reel of someone else’s life. … [BNPL] makes people think they can afford things they can’t afford.”

Gen Z hustles for financial security with ‘no idea’ how the future will look

Millennials started their careers in an economy hampered by the Great Recession, and Gen Zers haven’t had an easier time. The pandemic negatively affected finances for 75% of Gen Z, according to a 2023 TransUnion survey, compared to 60% of Millennials who said the same about the Great Financial Crisis of 2007–2009.

Gen Z is more stressed about credit than their Millennial counterparts were in 2013 — but they also have better credit scores, at a median of 665 in 2023 compared to 634 for Millennials in 2013, according to TransUnion.

When they don’t fall into doom spending, Gen Zers have an aggressive approach to career growth and saving. Embracing a “delulu” (or delusional) level of confidence in the workplace may help Zoomers achieve faster raises and promotions. If that doesn’t work, “we’re not afraid to quit,” says Joseph.

The ability to start a one-person online business with little to no capital may fuel some of that workplace confidence. “A lot of Gen Zers emphasize side hustles, businesses, and other ways to make a living outside the traditional corporate realm,” said Zhang.

Still, Gen Zers face novel challenges as they enter the workforce. Joseph says he’s noticed an uptick in peers falling for scam job listings that steal personal information from candidates. Job scams cost Americans $500.8 million in 2023 and accounted for more than 108,000 fraud reports, according to the Federal Trade Commission.

Generative AI makes it easier for scammers to create false listings. AI could also present new difficulties at work. C-suite executives estimate nearly half (49%) of all current job skills will be irrelevant in 2025, according to an edX survey.

“The Boomers seem to love AI. I don’t understand why they love it. They think that it’s the future. I think it’s going to kill us all, honestly,” said Joseph.

But Gen Z survived a pandemic during their formative years. They’re nothing if not adaptable.

When asked what she would do if a new law banning TikTok goes into effect, Zhang was optimistic. She’s diversified her content distribution and prefers not to let fear rule her life. “If I can provide value once, and if something happens, I’m confident in my ability that I can do that again.”

Growing up alongside rapidly evolving technology and coming of age during unprecedented global events, Gen Zers learned early that the only constant in life is change. Stashing away savings provides some stability in an unpredictable world.

Zhang’s main financial goal is to reach a point where money is “no longer an issue or something I have to think about. Instead, it becomes a tool — something that can help me achieve my goals and dreams, and allows me to spend time the way I feel like it without money being the main factor.”

Joseph seems more uncertain, but tracking his expenses and realizing he can now afford his housing costs has eased some anxiety. “I have no idea what the future is looking like. I’m trying not to worry about it.”

Methodology

Insurify’s data science team analyzed its proprietary database of more than 97 million quotes to determine car insurance costs by generation.

Insurify pulled full-coverage car insurance rates for Zoomers between 18 and 27 years old, Millennials between 28 and 43 years old, Gen Xers between 44 and 59 years old, and Baby Boomers between 60 and 78 years old. Rates reflect the median for a driver with a clean driving record and average or better credit.

Insurify also surveyed 1,000 Gen Z Americans between the ages of 22 and 27 about their financial habits, housing expenses, and driving costs. To view and download more Insurify data, visit the Auto Insurance Data Center.