Gen Z is coming of age in an economy where the traditional path to prosperity no longer works, and instead of giving up, they’re beginning to build new ones.
For 70 years, the American Dream followed a predictable sequence: school, job, promotion, mortgage, house, financial freedom. But for many young adults, that path has disintegrated. Headline economic numbers such as GDP and unemployment still look fine, but they were never what made people feel successful. Success was hitting a milestone and trusting the next one was within reach. Now, young adults are having to forge their own paths, without any certainty about where those paths will lead.
Why Homeownership Feels Out of Reach
In many high cost-of-living metros, achieving homeownership looks impossible. In Los Angeles, 99% of homes for sale are unaffordable to a family earning the local median household income. In New York, 92% of homes for sale are unaffordable, and in Boston, 89% are.
In these places, even when a young adult manages to find an entry-level job, gets promoted and earns more money than their neighbors, they still struggle to afford a home. And this isn’t just a coastal city problem. Currently, only 39% of 28-year-old Americans own their home, compared to 43% of Gen Xers and 44% of baby boomers when those generations were 28 years old.
Gen Z can see that landing a job, getting raises and saving money from paychecks is not a guaranteed path to homeownership. AI technology is disrupting entry-level work, making it harder for young adults to reach even that first milestone on the path to homeownership. When the traditional path to the American Dream disappears, everything starts to feel meaningless.
How Economic Nihilism Takes Hold
Nihilism is the philosophical belief that life is meaningless. Economic nihilism is the belief that pursuing economic success is meaningless. The economy is still doing fine, but people feel worse about it because the signifiers of success feel more out of reach.
Researchers at the University of Chicago and Northwestern found that a lack of affordable housing leads to economic nihilism, or “giving up.” Giving up manifests as higher consumption, less effort and more risk-taking.
What Millennials Learned From Their Crisis
As a Millennial who was born in 1988 and graduated from college in 2010 — the worst point of the Great Recession — I understand Gen Z’s despair. In 2010, the unemployment rate for 20- to 24-year-olds reached its highest level on record going back to 1948, at 15.5%. For comparison, in 2025 it was 8.3%. And like Gen Z, we Millennials carried the burden of student debt with no clear end in sight. The preceding crash in home prices made homeownership relatively cheap, but we were too unemployed and too debt-burdened to take advantage of low home prices.
Instead of focusing on our parents’ path to success, working a stable job for decades, we had to forge a new way. For half a decade, Millennials normalized job-hopping, became entrepreneurs (with the help of cheap debt) or went to graduate school (that’s what I did) in the hopes that the job market would improve in a few years’ time.
By 2015, the job market had improved, and we were able to increase our earnings and pay off much of our debt. And much to our elders’ astonishment, we even became homeowners. Today, a 44-year-old Millennial is as likely to be a homeowner as Gen Xers were at that same age.
Why Sentiment Is Low Even When The Economy Is Strong
I understand how Gen Z’s economic situation may feel more futile than what Millennials endured. The economy is not in recession, but paradoxically, consumer sentiment is at record lows, with adults under 35 experiencing the largest percentage drop of any age group over the last 10 years, according to the University of Michigan Survey of Consumers. The stock market is booming, but that only benefits older, wealthier Americans who have savings invested in the stock market. It’s like Gen Z can see the party happening inside the mansion, but they’re locked outside the gate.
When Luck Replaces Effort
At the same time, Gen Z can see that certain members of their generation have gotten their key to prosperity without much effort, through intergenerational wealth or lucky bets. Fewer than 6 in 10 recent Gen Z and Millennial homebuyers used money they earned themselves to fund their down payments, according to a 2025 Redfin survey.
Instead, many young adults used cash gifts from family, inheritance money or crypto investments as a fast pass to homeownership. When success is not achieved through hard work but instead luck — at birth or through betting — the signifiers of success lose their meaning because success has become detached from effort. But effort does still matter. It’s just much less clear which endeavor to pour that effort into.
Why Housing Affordability May Improve
Whatever path Gen Zers embark on, the ingredients for homeownership will become available to them in due time: Home affordability is starting to improve.
The income needed to afford the mortgage for a median-priced home went down in 2026, and Redfin economists predict that affordability will keep improving over the next 10 years as incomes grow faster than housing payments and Baby Boomers pass on. Gen Z will take the homes of Baby Boomers, renovate them, add units and reimagine what the American Dream means to them.
Why More Choice Creates More Anxiety
Joseph Andrew, a Gen Zer currently pursuing a bachelor’s in accounting at the University of Miami, says he is more optimistic about the economy than his peers. “The opportunities that technology has opened are much more expansive than what existed in the past. Every time we open social media we see a new example of someone getting ridiculously rich with a niche business. Gen-Z underappreciates how much better off they are, but because homeownership is the one thing they can’t have yet, and they hyperfocus on it.”
However, focusing on the infinite opportunities may induce even more anxiety for Gen Z. According to philosopher and YouTuber Michael Burns, Gen Z’s economic anxiety is what Kierkegaard called the anxiety of the infinite: “We have anxiety when we only have a set of finite options, but the worst anxiety is the anxiety of the infinite. Knowing that everything is potentially possible.”
How Gen Z May Shift Housing Policy
As more young adults remain renters into their late 30s, Burns believes that Gen Z will channel their effort into advocating for renters’ rights: tenant-led housing and more public housing for the middle class.
This trend is already taking off in liberal, high-cost cities. Mayor Mamdani made protecting New York’s tenants against negligent and exploitative landlords a key issue in his election. The city of Seattle recently acquired a 150-unit downtown apartment building, with plans to house families paying both market-rate and subsidized rates for middle- and low-income households, and plans to acquire and develop 1,800 housing units with its social housing developer.
Other cities may follow suit, as more young adults identify as renters rather than aspiring homebuyers. Unintuitively, making renting more affordable could increase the Gen Z homeownership rate in the long run, as it makes saving up for a down payment more achievable.
Why Redefining The American Dream Requires More Housing Options
As the American Dream of owning a single-family home with a big lawn and a picket fence loses its traditional meaning to young adults, homeownership will take on new meanings that fit into Gen Z’s redefinitions of success.
If success means community, owning a multifamily building is a way to provide housing for friends and family. If success means artistic expression, owning a home may mean decorating and renovating it to your specific taste, without regard to resale value. If success means enjoying urban living, owning a condo near public transit will be more desirable than a single-family home in the suburbs.
The younger generation must challenge policymakers to make these new paths achievable. That means eliminating single-family zoning that locks Americans into one unaffordable path. We need more housing options, such as duplexes, ADUs, condominiums and apartments, in sizes suitable for singles and families, so young adults gain the means to achieve their own definition of the American Dream.
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