A divide is emerging between young homeowners and their renting peers, according to new survey data from Redfin.

Nearly 70% of Millennial and Gen Z homeowners report being better off financially compared to four years ago, while only 52% of renters in the same age groups have seen similar improvements.

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The findings highlight a growing economic disparity tied directly to homeownership among younger Americans. The gap is more pronounced compared to older generations, where the financial differences between owners and renters are much smaller.

“Economic inequality is on the rise between young people who have been able to break into homeownership and young people who haven’t,” Chen Zhao, Redfin’s Economics Research Lead, was quoted in the report.

The timing of home purchases has proved crucial, according to the real estate brokerage. Many young buyers who entered the market during the pandemic’s low interest rates have since built substantial equity as home values surged. 

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Those who missed that window now face barriers to entry, with mortgage rates more than double their pandemic lows and home prices near record highs.

The contrast in financial outcomes is clear — only 18% of Millennial and Gen Z homeowners report being worse off compared to four years ago, while 26% of their renting counterparts have seen their finances deteriorate.

The impact extends beyond personal finances into political priorities. A related Redfin survey found housing affordability weighs heavily on renters’ minds heading into the presidential election, with 32% listing it among their top three issues compared to 17% of homeowners.

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Baby Boomers are an outlier in the data, with both owners and renters more likely to report declining financial situations. About 38% of Boomer homeowners and 40% of renters say they’re worse off than four years ago, potentially reflecting the challenges of living on fixed incomes during a period of high inflation.

The findings come from a Redfin-commissioned survey conducted by Ipsos in September, sampling 1,802 U.S. residents aged 18-65. The study defined Gen Z as ages 18-27, Millennials as 28-43, Gen X as 44-59, and Baby Boomers as 60-65.

While rent growth has recently slowed, rents remain about 20% above pre-pandemic levels. The continued pressure on renters, combined with high costs for necessities like groceries, suggests the financial gap between young owners and renters may continue to widen.

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