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The dream of homeownership is alive and well for Gen Z Americans, despite numerous challenges—from high interest rates and soaring home prices to the burden of student loan repayment.
And yet, for those who have managed to buy property, a new Insurify survey found that a whopping 90% of Gen Z homeowners (born between 1997 and 2012) underestimated the cost of owning a home, and this is further hurting their finances.
The survey found that many respondents were surprised by several unexpected expenses, including home insurance, closing costs, and perhaps most egregious of all, mortgage interest.
By not doing the financial homework ahead of time, the youngest generation of homeowners might not only find themselves house poor for years, but could even risk losing their homes entirely.
Gen Z wants to buy—but most aren’t ready yet
Gen Z Americans—with a median age of 22—made up a meager 3% of all homebuyers, according to the 2025 National Association of Realtors® Home Buyers and Sellers Generational Trends study. This represents the smallest share of any generation alive today.
This finding is not surprising, given that, according to the Insurify survey, only 8% of Gen Zers say they can currently afford a down payment.
“Gen Zers make up a small percentage of American homebuyers because they have less money saved and lower incomes than other age groups,” explains Matt Brannon, data journalist at Insurify.
Despite the financial burden, however, 40% told Insurify that they expect to buy a home in the next three years. That figure jumps to 47% for Gen Zers in the South, “where property values are generally cheaper, and falls to 34% in the West, where homes tend to be more expensive,” according to the survey.
While the number might seem high, Brennan points out a downward trend: Fewer Gen Zers plan to buy a home this year compared with last year’s survey.
“When we surveyed them last year, many likely expected interest rates to decline. But interest rates remain high, keeping previously affordable homes much more expensive in terms of a monthly mortgage payment,” he says. Economic fears are also playing a role.
Gen Z homeowners are feeling the burn of hidden costs
Current Gen Z homeowners report facing a range of unexpected expenses that are placing significant strain on their finances—expenses that will only increase with time.
Insurify found that 30% of Gen Z homeowners underestimated these costs, which include the following:
Maintenance and repairs
As Peter Piotrowski, chief claims officer at Hippo Home Insurance, explains, maintenance is an ongoing part of homeownership. Hippo’s annual Housepower Report found that 83% of homeowners experienced unexpected maintenance in the past year, with 46% spending over $5,000 out of pocket on repairs, he says.
“All homeowners should be prepared with an allocated budget for proactive maintenance,” he adds.
Insurance premiums
Meanwhile, 35% of respondents said they were caught off guard by the cost of home insurance. That number rose to 40% among Gen Z homeowners in the South—an area especially vulnerable to natural disasters like hurricanes, which often drive premiums higher.
“Concerns about home insurance premiums, which are up nationally by 30% since 2021, are nothing new. Another recent Insurify survey found that 37% of Americans with home insurance said it’s unaffordable,” according to the survey.
Property taxes
According to Brennan, 2 in 5 Gen Z homeowners also said their property taxes ended up being higher than anticipated.
The survey found that for many, “property taxes (40%) and home insurance (35%) took precedence over other notable expenses, such as closing costs and the home’s purchase price.”
Of course, this varies where you live. In certain counties in places like Alaska, Louisiana, and Alabama, median property taxes were less than $250 a year in 2024. Then again, in certain counties within California, New Jersey, New York, and Virginia, property taxes all came in exceeding $10,000 a year.
How Gen Z can plan smarter for homeownership
Brian Vieaux, president and COO of FinLocker, a financial fitness platform that helps consumers prepare for a mortgage, says one issue for first-time buyers is that they budget like renters.
This translates into fixating on the monthly mortgage payment and overlooking the ongoing costs of maintenance, insurance, taxes, and utilities, he adds.
“That’s why nearly 90% of Gen Z homeowners feel blindsided. It’s not a lack of ambition; it’s a lack of financial visibility,” he says.
Yet, experts say that Gen Z hopeful buyers can also set realistic expectations and build financial stability before buying, with a meticulous, well-thought-out plan.
Building an emergency fund beyond the down payment
Building and beefing up an emergency fund is key to financial stability. Experts recommend that this equates to at least three to six months of living expenses.
“This rainy day fund will minimize the risk of going into debt or dipping into your savings in the event of an unexpected emergency, such as job loss or a medical diagnosis,” says Steve Sexton, CEO of Sexton Advisory Group.
He also recommends starting to save and investing early and staying the course. As with consistency, the power of compound interest can help you build momentum faster than you think.
Researching all the hidden costs of homeownership in advance
This reality check can save you financial surprises and help you reset expectations.
For instance, Carla Gericke, a New Hampshire agent at Porcupine Real Estate, says that one of her Gen Z employees recently graduated from college and had to leave New Hampshire, not because she wanted to, but because she and her husband couldn’t afford to buy a home here right now.
“They were pre-approved, but once they factored in taxes, insurance, maintenance, and closing costs, it was game over,” she says. “Run the numbers early. Use online tools. Talk to local Realtors®. Don’t fall in love with a house until you know the full monthly cost. (Or prepare to be sad).”
Shopping around for insurance and mortgage lenders to reduce long-term costs
Insurify’s Brennan says that comparing home insurance premiums and coverage from multiple insurers can help Gen Zers reduce their premium in most states.
“When I hear young adults talk about buying a home, the focus is often on the home’s appearance and purchase price. It’s easy, but unwise, for potential buyers to overlook things like property taxes, potential damage from severe weather, and home insurance costs,” he says.
Getting creative
There are some ways—such as house hacking, which is renting out a room or parts of your house—that can help offset the costs of mortgage payments and all other homeowning expenses.
Ryan Barone, co-founder and CEO at RentRedi, a property management platform, says these extra income streams could also bring in enough income to make bigger payments to pay down the mortgage faster or build up your savings and investment accounts.
“Want to own a home in one to three years? Start now by building an emergency fund, tracking spending habits, and learning what your local costs actually look like. Homeownership is still possible, but it takes more than hope and a down payment calculator to get there,” says FinLocker’s Vieaux.