Where Will the Younger Generation Live?

Challenges such as climate change and affordability impact younger renters and buyers most. They’re finding creative ways to overcome these obstacles.

Kayden Roberts and her friends consider themselves digital nomads, but they also wanted a place to settle down on occasion. Finding an affordable house in the U.S. felt impossible, so they purchased a villa in Da Nang, Vietnam.

“This wasn’t just a financial investment, it was our bold experiment in communal living and an ambitious venture into the world of Airbnb hosting,” says Roberts, chief marketing officer of CamGo, a video chat app to meet strangers for friendship and to create community. “When we’re in town, the villa transforms into a vibrant co-living space. Our shared living room doubles as an idea incubator where business plans and travel hacks are discussed over Vietnamese coffee or local craft beer.”

When Roberts and her friends are away, they share the income from Airbnb guests.

While buying a property overseas isn’t for everyone, creative solutions to affordability challenges lead young renters and homebuyers include co-living in the U.S., moving to more affordable markets, living with relatives or staying close to their parents for financial and childcare support. 

Members of the Gen Z generation also share a deep concern about the environment, with 85% of that generation responding that they have been greatly affected by climate change in a COGNITION Smart Data survey by Green Builder Media. For many, that concern impacts where they choose to live.

Migration Patterns for Young Renters

While more than 80% of Gen Zers want to buy a home and 45% hope to buy within five years, according to COGNITION Smart Data, the oldest member of that generation will turn just 27 this year. More Gen Zers continue to live at home or are renting their first homes rather than own at this stage of their lives. 

For three consecutive months, Minneapolis has been the most sought-after cities among renters, according to data from RentCafe. Atlanta and Queens are the second and third most popular cities where renters are searching for apartments, followed by Detroit, Cleveland, Overland Park (Kanas), Philadelphia, Orlando, Spokane, and Washington, D.C. 

“Our analysis on what makes cities appealing to renters considered four key metrics: availability rate, page views, favorites, and saved searches,” says Adina Dragos, a writer and research analyst at RentCafe. “Minneapolis's popularity among renters is largely due to its cost of living, which is 6% lower than the national benchmark.”

Renters seeking to move tend to focus on housing and other costs, the job market and lifestyle considerations.

“For instance, the unemployment rate in the Minneapolis metro area is 23% lower than the national average of 3.9%, thanks to several large corporations such as UnitedHealth Group, Target and Best Buy that have a significant presence here,” Dragos says. “This bustling job market is enticing for those seeking employment opportunities, particularly renters from Chicago where the unemployment rate stands at 4.5%, which helps explain the surge in interest.” 

Minneapolis has a dynamic walkable downtown with new restaurants, Dragos says. In addition, 40% of commuters rely on public transit or bicycles to get to work.

“The University of Minnesota makes Minneapolis an attractive spot for students, academic staff and young professionals, adding to the city's diverse renter appeal,” Dragos says.

Regionally, the West has had the highest number of cities among the top 30 most popular with renters for two consecutive months, according to RentCafe, with the Midwest and the South close behind.

Moving in Response to Climate Considerations

Migration patterns in recent years have shown that while some people choose to move away from areas prone to hazards such as wildfire and hurricanes, others continue to move into those regions because they may be desirable in other ways. 

However, a recent survey by Forbes found that 64% of respondents cited climate change or better weather as a reason to move. Among those who cited climate change as an impetus to move, 35% were millennials and 30% were Gen Zers.

Locations with poor air quality are losing residents faster than in the past, according to a Redfin survey, while locations with low risk of poor air quality are gaining residents. But that may have as much do with prices as with concern about wildfire smoke and air pollution. 

Most of the housing markets people are leaving tend to be expensive metro areas in Western states such as California, Washington, Oregon and Idaho. In an earlier Redfin study, 8.4% of people said they would consider moving due to climate change.

Climate change has a two-pronged impact on Adirondack Park, which covers six million acres in Northeastern New York, says Dr. Jay Curt Stager, a natural sciences professor at Paul Smith’s College in the Adirondack Lakes region.

“The most obvious impact is the change to our winters,” Stager says. “It’s not just this year – the snow and ice have been disappearing for years. The ice is forming later and thawing earlier. The reduction in the amount of snow affects our wildlife, the lakes, our culture and our economy.”

The second impact of climate change that jeopardizes the Adirondacks is the influx of “climate migrants” who want to escape fires, droughts, rising sea levels and sweltering cities, Stager says.

“Gentrification is a big issue because a lot of the people coming to the Adirondacks are wealthy and attracted to this area because it’s famous for its beauty,” Stager says. “The pandemic accelerated this, and climate change has an amplifying effect on our housing market. We’re losing affordable housing for local people, and businesses can’t expand because there’s nowhere for their employees to live.”

Many homes have been converted to short-term rentals, Stager says, which removes them from the housing market. 

“In theory, we should just build more housing, but this is state-owned land, and no one can build on it,” Stager says. “I also worry that the strong legal protections for Adirondack Park could be eroded as demand for land and development increase.”

Adirondack Park, a national historic landmark, is partially owned by New York State, with the rest devoted to forestry, agriculture and recreation. 

“I can easily see an unholy alliance between developers and affordable housing advocates that could get rid of the environmental protections in the Adirondacks to allow for development,” Stager says. 

Climate change is hurting local employment opportunities, since many long-term residents earn a living with snowplow services, renting snowmobiles and working in the hotels, Stager says. Limited snowfall impacts those jobs in winter. Still, climate migrants prefer the area, especially now that it has a longer, more pleasant summer than the places they’re escaping. 

Living with Family

For prospective homebuyers, particularly in the Gen Z generation, affordability tends to be a greater driver of moving patterns than climate change. Recent research by the National Association of Home Builders found that the share of young adults ages 25 to 34 living with their parents was 19% in 2022. 

But there’s a wide variation by state, with more young people in high-cost states living with their parents. For example, 28% of young adults live with their parents in Hawaii, 26% in California and New Jersey, and 23% in New York and New Hampshire. On the flip side, in North Dakota less than 5% of young adults live with their parents. 

Among millennials and Gen Zers who don’t live with their parents, 62% live near them and 57% live in the town where they grew up, according to a LendingTree survey. Among those who stayed in their hometowns, 42% said they felt obligated to stay near family, 36% said it was convenient and 33% said they couldn’t afford to move to a new location.

Most young millennials and Gen Zers (68%) say it’s important to be near family and 60% of that group says they simply enjoy living near their relatives. Other big reasons for living close to family members are the financial and emotional benefits for their children. Among millennials and Gen Zers with kids, 73% say it’s important to live near family and 21% say childcare is the number one reason. 

Remote work offers greater flexibility to choose where you live. About half of millennials and Gen Zers (47%) said they would consider moving back to their hometowns, according to LendingTree. But moving back home doesn’t always solve affordability issues. 

Maybe that works if you’re leaving New York City to buy a home in a low-cost housing market in Iowa or Nebraska, but if your hometown is now one of the nation’s boomtowns like Atlanta, Orlando or Nashville, you may find that prices are higher than you think.

Many young people moved in with their parents and grandparents before and during the pandemic, a trend that seems to be continuing, according to the National Association of Realtors, which found that 14% of buyers purchased a multigenerational home in 2023. The household makeup for a multigenerational home could include elderly relatives or adult children living together to share expenses or combining resources to buy a larger home. 

Another dynamic for those who want to share housing expenses is to buy a home with a friend or group of friends, as Roberts did. Nearly 15% of respondents to a survey by JW Surety Bonds, a bond and insurance provider for contractors and other businesses, said they had purchased a home with a non-romantic partner, and nearly half (48%) said they would consider it. The survey found that Gen Zers are most interested in co-buying a home with a friend (70%), while other generations are more likely to consider doing this for an investment property. 

While the benefits are clear – sharing costs and affording a better home – there are concerns about the drawbacks of buying with friends. Most people (79%) said they worried about the potential for interpersonal conflict, although 25% of Gen Zers said they think buying a home with a friend could strengthen their relationship. Other possible drawbacks include legal and financial complications, potential financial loss and difficulties in transferring ownership. 

Issues of affordability and climate impacts affect housing options, but choosing to live in a lower cost area, one at less risk of losses related to natural disasters, close to family or sharing expenses with friends and family are all ways to overcome those challenges.  

Publisher’s Note: This content is made possible by our Today’s Homeowner Campaign Sponsors: Whirlpool. Whirlpool takes sustainability seriously, in both their products and their operations. Learn more about building and buying homes that are more affordable and less resource intensive.