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Remember when foregoing avocado toast was all the rage among millennials struggling to save their nickels and dimes in the name of becoming first-time homebuyers?
Well, now that pocket change could be put to another good use by desperate millennials and their younger Gen Z cousins: scratching off lottery tickets in search of a home-sized jackpot.
A majority of millennial and Gen Z Americans, cohorts born between 1981 and 2013, now believe their best chance at affording to buy a home is to win the lottery, according to the results of a survey released Wednesday by Zillow.
The company found disbelief among millennials and Gen Z that they’ll ever be able to afford a home — yet many are optimistic that they’ll buy one within the next five years, the survey found.
“These findings highlight the gap between Gen Z and millennials’ dream of owning a home and their ability to actually make it happen,” Amanda Pendleton, a home trends expert for Zillow, said in a statement. “Combine rising rates with record-breaking home value appreciation and it’s easy to understand why younger generations are wondering how they’ll ever be able to afford a home.”
The spike in interest rates since early 2022 means buyers are paying $431 more per month than they were a year ago for a typical mortgage. Paired with stubbornly high prices after a period of record-high price appreciation and the barrier to buying a home in the U.S. is, indeed, quite high.
For a typical home in the U.S. that costs $334,944, a 20 percent down payment would clock in at about $67,000. But Zillow sought to dispel the myth that buyers need such a large down payment to buy homes.
The younger Gen Zers are actually a bit more optimistic about their chances at homeownership, according to the survey results. Fifty-two percent of the generation born between 1997 and 2013 believes it would have to win the lottery to buy a home.
Fifty-seven percent of millennials, meanwhile, believe they need to hit the jackpot to buy a house. Anyone born between 1981 and 1996 is a millennial.
Just under 52 percent of millennials are homeowners, according to data from the U.S. Census.
Nearly all of those surveyed said they’d need to make changes in order to afford a home if they don’t win the lottery, including changing careers or picking up more jobs, the study found.
To come up with any down payment, more than 1 in 4 surveyed said they would need to give up all spending on clothes, dining and entertainment.
Twenty-seven percent of Gen Zers surveyed said they would need a second or third job to buy a home, compared to 39 percent among millennials.