Cotality data shows Gen Z is cutting back more than any other generation to reach homeownership
Gen Z homebuyers are more willing than any other age group to cut lifestyle spending to buy a home. According to Cotality's Consumer Sentiment Report, 78% said they are prepared to reduce discretionary expenses to reach ownership. That edges out Millennials at 77% and far outpaces Baby Boomers, at just 50%.
The multi-market survey covered buyers across the US, Canada, the UK, Australia, and New Zealand, and reflects a generation entering the market with recalibrated expectations.
The report, produced by Cotality, a global property information, analytics, and data-enabled solutions provider, documents a cohort shaped by persistently elevated housing costs and a notably higher tolerance for financial trade-offs than any generation before it.
Smaller homes, bigger commitment
The same pattern holds on property size. Seventy-four % of Gen Z respondents said they would accept a smaller home to advance their ownership timeline — against 64% of Millennials, 57% of Gen X, and 43% of Baby Boomers.
Across all generations surveyed, 65% said they would seek a smaller mortgage to improve affordability, and 69% had already cut or planned to cut spending on dining, travel, and retail.
"Gen Z buyers have grown up in an environment of elevated housing costs, so they're entering the market with different expectations," said Selma Hepp, chief economist at Cotality.
"They're more willing to adjust their budgets, reduce discretionary spending, or consider a smaller home if it means achieving homeownership sooner. That flexibility helps explain why they're the generation most prepared to move forward despite affordability challenges."
That intent is already driving origination. Mortgage Professional America's analysis of Gen Z's record purchase mortgage market share found the cohort now representing one in five rate locks and nearly a third of all first-time homebuyer loans as of Q2 2026.
Where the US stands globally
The US sits near the global median across all Cotality measures, reflecting a market under pressure but with more flexibility than the UK. British buyers registered the weakest appetite for compromise, with just 42% willing to purchase a smaller home against a global average of 59%.
Canadians proved the most open to downsizing at 68%, while Australians led on lifestyle cuts at 75%.
Hepp challenged the view that renting remains the safer near-term strategy.
"At first glance, renting at $2,000 per month looks cheaper than buying with a $300,000 mortgage," she said.
"But once you account for principal paydown and the federal tax benefit, ownership becomes roughly cost-neutral at a 6.6% mortgage rate and clearly favorable at 6.0%. Over 10 years, the lower-rate ownership scenario produces nearly $24,000 in savings relative to renting, even before considering any home-price appreciation."
The buyers most ready to move are younger, less anchored to ideal conditions, and already restructuring their finances to get there.
Analysts who have forecast buyer leverage in the 2026 housing market reset point to stabilizing rate expectations and growing inventory as factors that could sharpen Gen Z's market edge further.
"The dream of homeownership remains, but the route to achieving it is increasingly defined by flexibility, compromise, and careful financial adjustments," Hepp said.
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