Buying vs. Renting: Navigating Generational Mindsets

Two white arrows painted on black asphalt. The one on the left says BUY, the one on the right says RENT. There's a person with red shoes and cargo shorts with one foot on each arrow. The view is a point of view of the person looking down at their feet.

The current housing market has created a myth that younger generations prefer to rent than buy. However, expert surveys show that the choice to rent is often a function of lacking affordability. Let’s look at how the future of homeowners—Millennials and Gen Z—view buying vs. renting.


  • Affordability is the main reason why younger generations rent instead of buy.
  • Lacking inventory plays a role in decision making, and Build to Rent may be a middle ground.
  • Most Millennials and Gen Z buyers have high expectations for post-closing customer service, and 2-10 Home Buyers Warranty (2-10 HBW) can help.

“I’d buy if I could afford it”

A drawing of a pink piggy bank on its side with three coin around it. There's a house on top of the piggy bank, and it has smashed open the side of it. Everything is on a tan background,

Recently, Millennials became a majority-homeowner generation. According to past trends, it took Millennials longer to reach this point as a generation than past generations, such as Generation X and the Baby Boomers.

However, it doesn’t seem like this was necessarily an active choice Millennials made.

According to a recent Zonda survey, 98% of Millennials want to become a homeowner at some point, if they aren’t already.

That same survey showed that only 21% of Millennials chose to rent because they simply preferred renting.

A much larger portion said that they rent because they can’t afford to buy where they want or can’t afford to buy at all.

With the market coming off of its astounding sell-side highs, builders have begun offering more incentives to entice younger potential buyers.

The role of inventory in buying vs. renting

A grid of different colored human representations filling the image with three houses in the middle.

Several factors have affected inventory in 2023.

  • Higher interest rates and declining home values have kept potential sellers from listing.
  • Institutional investors and equity-rich buyers are purchasing multiple homes.
  • Under-building following the 2008 housing crash has made options like starter homes less available.

However, builders can and have affected inventory in positive ways recently. For example, according to Builder Online, new homes make up 30% of all inventory. Historically, new homes have tended to hover around 10% to 15% of all inventory.

Build to Rent could be a middle ground

a home with a For Rent sign in front of it.

The Build to Rent industry has grown substantially, and it may be a solid middle ground for Millennials who don’t yet own a home.

Well-built Build to Rent communities offer many of the amenities of home ownership (e.g. privacy, space) along with the sense of flexibility renting can provide (e.g., minimal maintenance).

What about Gen Z?

A notepad with the phrase "Generation Z" written in the middle. On the left of the phrase appear the words "pragmatic," "connected," and "global." On the right of the phrase appear the words "educated," "social," and "visual." The notepad rests on a wooden table. A black marker rests on the notepad.

Though Millennials comprise the biggest share of current and potential home buyers, builders are also starting to consider the needs of Gen Z buyers.

Consider some early stats about potential Gen Z buyers:

  • 72% intend to own a home someday.
  • 56% are intentionally saving money for a home.
  • Younger new-home housing markets (e.g., Houston) also tend to have younger potential buyers.

Though affordability is still a big obstacle for Gen Z buyers, the desire to own a home is strong. This could be a boon for new-home builders, especially in areas where development has already been booming, such as the South and Southwest.

Buying is preferred, along with good customer service

A White builder in a white hardhat shows blueprints to a White man in a suit coat and khakis and a White woman in a brown leather jack and white pants.

Between the two younger generations, home ownership is still a huge part of the American dream. And new-home construction continues to grow in popularity as these buyers come of age. Builders can take advantage of these desires by continuing to build quality homes.

As you build quality homes, it’ll be important to set expectations and offer peace of mind, especially because younger buyers have had to work so hard to achieve home ownership. A 2-10 HBW Structural Warranty can help you set expectations and provide peace of mind from Day 1 and onward.

Finally, another key aspect of appealing to these younger generations of buyers is to offer high-quality customer service, especially post-closing.  With 2-10 HBW’s Front Line Warranty Service, you can deliver on better post-closing warranty experiences for your customers with easy-to-use technology and support.

Given the current market, providing these positive experiences can be challenging for builders, but failing to deliver can be even worse.


A White man with brown beard and white hardhat and gray zip-up jacket standing in front of the construction framing of a house

2-10 Home Buyers Warranty (2-10 HBW) has helped builders protect themselves and their buyers from the unexpected for more than 40 years. And now, we’re going above and beyond to help builders offer outstanding post-closing service that younger generations of buyers expect through our Front Line Warranty Service.

As younger generations pursue home ownership, they’re showing a preference for new homes. 2-10 HBW can help you protect your profits, promote your quality, and plan for a successful future by controlling what’s behind you.

Learn how you can protect your business and add valuable selling points to your new builds with a 2-10 HBW Structural Warranty.

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