Younger consumers are getting creative in order to buy homes in the midst of the current affordability crunch, leading to a surge of interest in “house hacking” — renting out part of a home to generate extra income.
A recent Zillow survey revealed that more than half of millennial (55%) and Generation Z (51%) buyers find it “very” or “extremely” important to have the opportunity to rent out part of their property. Younger buyers are placing more focus on house hacking than all buyers at large as 39% of all respondents considered the opportunity to rent out part of their home as very or extremely important.
Zillow called the surge in interest among young buyers a “pragmatic response to the financial challenges of homeownership.”
“Younger homebuyers — mostly Gen Z and millennials — are especially into the idea of rental income as a key factor in their homebuying decisions,” said Manny Garcia, senior population scientist at Zillow. “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.”
Only 36% of Gen X buyers and 4% of buyers over the age of 59 placed the same high level of importance on being able to rent out a portion of their home.
Interest in the practice, however, is growing among all homebuyers. The 39% share of all homebuyers who are interested in house hacking is up from 34% in 2021 and up from 27% in 2018.
Notably, Latino homebuyers expressed more interest than other racial groups in using part of their property for rental income. Fifty-one percent of Latino buyers classed renting a portion of their home for additional income as a priority, compared to 46% of Black respondents and 40% of white respondents.