Interest in 'house hacking' explodes among Millennial and Gen Z home buyers seeking extra income

Rhea-AI Summary

Zillow®: More than half of young home buyers consider renting out all or a portion of their home to produce additional income. Latinx buyers are more strongly inclined to rent out a portion of their homes than all other racial groups. Young home buyers, particularly Millennials and Gen Z, are increasingly interested in 'house hacking' by renting out part or all of their home for extra cash. Zillow's 2023 Consumer Housing Trends Report reveals that most Millennial (55%) and Gen Z (51%) buyers find it very or extremely important to have the opportunity to rent out part of their home for extra income while living in it. Additionally, more than half of Millennial (59%) and Gen Z (54%) buyers say it's highly important to be able to rent out the entire home in the future. The report also highlights the disproportionate impact of the affordability crisis on households of color, with Latinx homebuyers expressing the highest interest in rental income. Zillow offers a suite of tools through Zillow Rental Manager to empower homeowners looking to generate income, including free listings, pricing suggestions, background checks, online applications, and state-specific lease generation.

• More than half of young home buyers consider renting out all or a portion of their home to produce additional income.
• Latinx buyers are more strongly inclined to rent out a portion of their homes than all other racial groups.

SEATTLE, Nov. 16, 2023 /PRNewswire/ -- Young home buyers, who more often struggle to afford a down payment and mortgage, are leading a popularity surge in house hacking – renting out part or all of a home for extra cash.

More than half of young home buyers consider renting out all or a portion of their home to produce additional income

A recent Zillow® survey shows most Millennial (55%) and Gen Z (51%) buyers find it very or extremely important to have the opportunity to rent out part of their home for extra income while living in it. That's compared to 39% of all homebuyers, which is up eight percentage points in the past two years.

Zillow's 2023 Consumer Housing Trends Report (CHTR) also shows that more than half of Millennial (59%) and Gen Z (54%) buyers say it's highly important to be able to rent out the entire home in the future, compared to 43% of all buyers. 

"Younger homebuyers — mostly Gen Z and Millennials — are especially into the idea of rental income as a key factor in their home buying decisions," said Zillow senior population scientist Manny Garcia. "For those first-time buyers navigating the 'side hustle culture,' where a regular 9-to-5 might not quite cut it for homeownership dreams, rental income can step in to help with mortgage qualification and smoothing out those monthly payments."

Zillow's survey also further illustrates the disproportionate impact of the affordability crisis on households of color, while reinforcing that people maintain an unwavering desire to own a home regardless of market conditions.

Latinx homebuyers prioritize the potential for rental income at a higher rate than other racial groups.  Among Latinx buyers, 51% expressed interest in renting a portion of the home for additional income while residing in it, followed by 46% of Black buyers and 40% of white buyers.

To empower homeowners looking to generate income, Zillow developed a suite of tools, available through Zillow Rental Manager, including free listings, pricing suggestions, background checks, online applications, and state-specific lease generation. These resources provide comprehensive support for those seeking rental income from their single-family or multi-unit properties.

Successful Buyers: High Importance of Rental Income from Home Purchase by Generation
(based on 2023 CHTR data)
Share of successful buyers who consider each very or extremely important	Total	Gen Z (Ages 18-28)	Millennial (Ages 29-43)	Gen X (Ages 44-58)	Boomers + Silent Gen (59+)
Opportunity to rent out a portion of the home for rental income while living in the home	39 %	51 %	55 %	36 %	4 %
Opportunity to rent out entire home in the future to produce rental income	43 %	54 %	59 %	40 %	8 %

 

Successful Buyers: High Importance of Rental Income from Home Purchase by Race
(based on 2023 CHTR data)
Share of successful buyers who consider each very or extremely important	Total	White	Black	Latinx
Opportunity to rent out a portion of the home for rental income while living in the home	39 %	40 %	46 %	51 %
Opportunity to rent out entire home in the future to produce rental income	43 %	42 %	51 %	57 %

 

Prospective Buyers: High Importance of Rental Income from Home Purchase among Home Shoppers
(based on 2023 CHTR data)
Share of prospective buyers who consider each very or extremely important	Total	Gen Z (Ages 18-28)	Millennial (Ages 29-43)	Gen X (Ages 44-58)	Boomers + Silent Gen (59+)
Opportunity to rent out a portion of the home for rental income while living in the home	46 %	43 %	58 %	40 %	13 %
Opportunity to rent out entire home in the future to produce rental income	55 %	56 %	64 %	51 %	23 %

About Zillow Group

Zillow Group, Inc. (NASDAQ: Z and ZG) is reimagining real estate to make home a reality for more and more people. As the most visited real estate website in the United States, Zillow and its affiliates help people find and get the home they want by connecting them with digital solutions, great partners, and easier buying, selling, financing and renting experiences.

Zillow Group's affiliates, subsidiaries and brands include Zillow®; Zillow Premier Agent®; Zillow Home Loans℠; Trulia®; Out East®; StreetEasy®; HotPads®; ShowingTime+℠; and Spruce®.

All marks herein are owned by MFTB Holdco, Inc., a Zillow affiliate. Zillow Home Loans, LLC is an Equal Housing Lender, NMLS #10287 (www.nmlsconsumeraccess.org). © 2023 MFTB Holdco, Inc., a Zillow affiliate.

 

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SOURCE Zillow, Inc.

FAQ

What is 'house hacking' and why are young home buyers interested in it?

'House hacking' refers to renting out part or all of a home for extra cash. Young home buyers, particularly Millennials and Gen Z, are interested in it as a way to generate additional income to afford down payments and mortgages.

What does Zillow's 2023 Consumer Housing Trends Report reveal about the importance of rental income to young home buyers?

The report shows that most Millennial (55%) and Gen Z (51%) buyers find it very or extremely important to have the opportunity to rent out part of their home for extra income while living in it. Additionally, more than half of Millennial (59%) and Gen Z (54%) buyers say it's highly important to be able to rent out the entire home in the future.

How does the report highlight the impact of the affordability crisis on households of color?

The report illustrates the disproportionate impact of the affordability crisis on households of color, with Latinx homebuyers expressing the highest interest in rental income compared to other racial groups.

What tools does Zillow offer to empower homeowners looking to generate income?

Zillow offers a suite of tools through Zillow Rental Manager, including free listings, pricing suggestions, background checks, online applications, and state-specific lease generation.