10
Loading video...
By Sheri Kasprzak
Money & Trends Editor
0
Share
Newsweek is a Trust Project member
See more of our trusted coverage when you search.Prefer Newsweek on Googleto see more of our trusted coverage when you search.
Gen Z is looking forward to a housing market crash, according to a new study from LendingTree.
Housing prices reached their highest levels in two decades this year, pricing out most Americans. But prices have cooled enough that some prospective homebuyers are dipping their toes back into the market.
Younger people are particularly hopeful that prices crash, opening the possibility of homeownership to them, according to the LendingTree report. Fifty-three percent of Gen Z respondents to the poll said they want the housing market to crash. By comparison, 43 percent of millennials and 46 percent of Americans with children under 18 are hoping the housing market crashes, according to the study.
Read More
US Cities Where 2024 Home Prices are Likely to Fall3 min read
Mortgage Rates Send Americans Scrambling to Refinance Loans4 min read
New Homeowners Lose $122,000 as Housing Prices Drop3 min read
The study found that 35 percent of Americans overall want the housing market to crash.
...
"Right now, home prices are high, as are mortgage rates," LendingTree senior economist Jacob Channel said in the report. "With that in mind, I can understand why some might wish for a housing crash that brings lower prices. Unfortunately, if the national housing market were to crash, odds are that it would bring down the rest of the economy with it."
Morgan Stanley and JP Morgan have predicted that housing prices will continue to cool in the coming year, but both have asserted that a housing market crash is not on the horizon.
Still, 39 percent of Gen Z Americans who responded to the survey said a crash is their only entry point to homeownership. Millennials are also banking on a crash to lead to homeownership, with 38 percent saying it's the only way they could afford to buy a home. By comparison, 24 percent of Gen Xers and 26 percent of Boomers need the market to crash to afford a home.
Crash is 'Unlikely'
The market is unlikely to crash, according to Mark Zandi, chief economist for Moody's Analytics. And even if the market did crash, the outcome would be catastrophic to the economy as a whole, he warned.
"A crash in house prices is unlikely, given the severe supply shortage," Zandi told Newsweek. "Price crashes also only occur when there are lots of foreclosures and distressed sales, which is very unlikely given that most homeowners have lots of equity in their home.
"So, if there is a crash in house prices, something really bad must be happening to the economy, with lots of lost jobs and surging unemployment. Beware what you wish for."
Gen Z Faces Financial Challenges
Gen Z, who are now in their teens to mid-20s, are graduating high school and college in a high-rate, high-price housing market.
One Reddit user pointed out recently that his generation graduated into a world of COVID-19 and canceled job offers, and many missed out on the chance to buy homes five to 10 years ago when prices were affordable and rates were low.
"I hear my [girlfriend's] family members talk about buying a $150,000 lakefront condo not too long ago [in Ohio maybe 10 years ago], and now it's worth $450,000," Reddit user DynamicHunter posted. "We just have no chance, especially with the double whammy of COVID surge in price and current interest rates with very little pay increases."
View 0 Comments
Submit Correction
View Editorial & AI Guidelines