Globally, supply in homes is not keeping up with demand.
Mar 18, 2025
Baby Boomers grew up seeing homeownership as the ultimate goal, a sign of stability and success. But Millennials and Gen Z face a housing market unlike any before. Homes today cost more, jobs feel less secure, and buying a home seems far less achievable. Globally, supply in homes is not keeping up with demand, and the cost for buying a home is constantly appreciating.
Add new values into the mix, like sustainability and flexible living, and it’s easy to see why younger people feel the traditional housing market doesn’t match their needs. But is this enough to make them genuinely hope for a housing crash?
Homeownership has become increasingly tough, especially for younger generations in the United States. One main reason is that the country currently lacks about 3 million homes. By 2025, that shortage might grow to 4 million. With fewer homes available, prices stay high, keeping many young people out of the market.
Europe is facing similar issues. In 2023, more than 25% of young Europeans lived in overcrowded homes, significantly above the general EU population rate of 17%. Countries like Spain, Italy, and Greece have even higher rates of young adults staying at home with parents, often into their early 30s. The reason? Jobs are unstable, wages are lower, and affordable homes are harder to find.
These challenges have made some think that Millennials and Gen Z actively want the housing market to collapse. But that’s not quite the case. A market crash similar to that of 2008 would have major consequences for everyone, especially young adults looking to buy a home.
The real wish here isn’t economic disaster. It’s just a matter of affordability. A major crash isn’t likely. There aren’t enough houses available, and without a surplus in supply, prices simply won't drop drastically.
Inheritance could be one way younger people might eventually find housing relief. In Europe, inheritance patterns are shifting, mainly due to falling birth rates and an aging population. Countries like Spain saw inheritances increase by 3.7% from 2021 to 2022. This means more young Europeans may soon inherit homes.
On the other hand, mortgages are becoming less appealing. Banks often ask for big deposits, stable jobs, and high incomes before approving a loan. In the current economy, with more temporary jobs and rising living costs, getting approved for a mortgage is harder and less attractive than ever. Younger people are pushed away from mortgages and toward alternative housing solutions or simply waiting for their inheritance.
Another element changing how young people think about housing is their strong values. Gen Z, in particular, cares deeply about the environment and sustainability. Around half of this generation expects companies, and their future homes, to actively address climate issues.
They look for homes built sustainably, equipped with energy-saving features, and using eco-friendly materials. These expectations are central to how younger generations make their housing decisions.
Younger generations also expect homes to adapt to flexible lifestyles. With remote work more common, people want properties that let them easily balance life and work. Homes near shared workspaces or designed for both living and working are becoming popular among Millennials and Gen Z alike.
Millennials and Gen Z don't genuinely want the real estate market to crash. Instead, they want housing that's affordable, sustainable, and suited to their lifestyle. They're not asking for chaos. They're asking for a housing market that works for them.
The younger generation is shaping the future of real estate. Their frustration is understandable, and their concerns valid. But the answer isn’t hoping for a crash, it's building more and more homes that reflect their needs. Real estate professionals who understand this will see that, despite challenges, “right now” continues to be the best time to buy or sell.
Reach out to us at M.Residence to help you move along this evolving real estate realm with confidence and a clear vision.
Until next time,
M.Residence Team
