Hidden Insurance Costs Hinder Gen Z’s Path to Homeownership

While each generation has faced its own challenges entering the housing market, Generation Z’s challenges go beyond just purchasing a home. For the youngest generation of adults, managing the ongoing costs of homeownership is the biggest hurdle to overcome, especially when it comes to hidden financial barriers like rising insurance premiums, property data provider Cotality reports.

As housing costs rise, Gen Zers are headed to more affordable states, where extreme weather events are becoming more common. More affordable states, such as Nebraska, Kansas, and Iowa, are seeing more frequent and costly storms, turning these affordable areas into high-risk zones. As a result, Gen Z homebuyers—who already spend a large portion of their income on housing—face added costs that hinder long-term financial stability. Although only 13% of 2024’s homebuyers were from Gen Z nationally, their presence in lower-cost markets—such as Des Moines, Iowa, and Dayton, Ohio—is far more pronounced. In these markets, Gen Zers account for one in every five homebuyers.

“Where Gen Z wants to live is different from where they can actually afford to buy,” says Molly Boesel, a senior economist at Cotality. “Right now, affordability points them toward the Midwest and the South, which also happen to be regions with higher exposure to natural disasters.”