Gen Z offers its thoughts on the renter vs. homeowner debate

Homeownership has long been seen as a marker of stability and success. But for many in Generation Z — the youngest group entering the housing market — that dream feels increasingly out of reach.

Rising mortgage rates, high home prices, student debt and career uncertainty are reshaping what housing looks like for this generation — and many are renting for the long term.

A recent survey of more than 2,000 U.S. renters conducted in January 2025 by Entrata in collaboration with Qualtrics sheds light on how Gen Z views renting, homeownership and financial priorities.

Financial barriers

The biggest obstacles to homeownership for Gen Z are financial. More than half of respondents (57%) said rising mortgage rates are a key factor preventing them from buying a home.

About 52% cited escalating home prices, while others pointed to student loan debt and career instability as the main reason a mortgage feels out of reach. Many also expressed reluctance to take on the responsibilities of home maintenance and repairs.

Roughly one in three renters said these costs and responsibilities were enough to steer them away from homeownership.

“Many can’t afford the upfront costs associated with home ownership like down payments for (private mortgage insurance) if they’re unable to meet the (loan-to-value ratio) necessary to eliminate the requirement for mortgage insurance,” the report explained. “This can increase mortgage payments enough to make them unaffordable.

“Beyond that, many are saddled with a significant amount of student loans and don’t feel comfortable taking on additional debt.”

Renting as a financial strategy

With homeownership blocked for now, most Gen Z renters see leasing as not just a temporary fix, but in many cases, a smarter financial move.

Nearly three in four respondents (72%) said they view renting as a better financial strategy than buying.

For some, renting still represents a stepping stone. Seventy-five percent said they see leasing as a short-term necessity, but 59% said they value the freedom that comes with renting.

The survey also found that 83% of Gen Z renters believe leasing allows them to save money for life experiences instead of tying funds to a mortgage. Nearly half said they prioritize travel and career growth over purchasing a home.

Flexibility over roots

Unlike earlier generations, many Gen Z renters aren’t rushing to put down permanent roots.

About 32% said they valued renting for the ability to move and adapt to changing financial and economic conditions.

This preference reflects a wider cultural shift. Owning a home with a white picket fence is no longer the default aspiration for young adults, according to the report.

Instead, financial freedom, mobility and experiences take precedence.

When asked how they would use extra funds if their rent were covered for a year, 39% said they would save for the future, 22% would pay off student loans or credit card debt, and 17% would use the opportunity to travel the world.

What renters want

Affordability was the single biggest factor for Gen Z when choosing a rental, with 75% ranking cost as their top priority. Location was next, with 62% valuing proximity to work, school or social activities.

Amenities like gyms or pools are less important, with just 30% placing them high on the list. More significant for this generation is the ability to rent alone — with 64% saying they live without roommates and want to keep it that way.

Sixty-three percent of Gen Z renters said they prioritize a “technology-first experience,” which includes digital leasing, app-based communication and even AI-driven support.

“Properties that don’t seem like they have a grasp on modern methods of engaging and communicating with residents can lose out on potential renters before even talking to them,” the report noted.

For Gen Z, financial stability doesn’t necessarily mean owning a home. It means having the flexibility to pursue opportunities without the weight of a mortgage.

“Instead of saving for that down payment, they are able to use that savings for things they view as more important, like traveling, not letting where they live determine their career path, and paying down other debts,” the report stated.