(New York Post) As housing prices continue their relentless ascent and interest rates hit record highs, a new trend has emerged among younger generations eager to embrace unconventional solutions to secure their slice of the American Dream.
Dubbed “house hacking,” this practice involves renting out parts of owned properties to generate additional income, such as a sublet to help subsidize their mortgage.
A recent report by Zillow, surveying over 6,500 recent homebuyers between April and July 2023, uncovered a remarkable shift in attitudes toward house hacking.
Nearly 4 in 10 new buyers deemed this practice a crucial opportunity, marking an eight-percentage-point increase over the past two years.
More than half of millennial and Gen Z homebuyers say house hacking is a “very” or “extremely” important opportunity. Getty Images/iStockphoto
The allure of house hacking is especially pronounced among millennials and Gen Z, with over half of those in the survey expressing enthusiasm for the concept.
The median house price surged to $413,874 in October, up 3.5% from the previous year, while the average 30-year mortgage rate skyrocketed to 8%, the highest level in 23 years, according to Zillow.
“In many places, you need to earn six figures to afford a starter home, so it makes sense for young people who are seeing how expensive homeownership is to want options,” Daryl Fairweather, chief economist at Redfin told CNBC.
Redfin’s own analysis shows that individuals need a salary of over $114,000 to afford a median-priced house in the US.
“Having the option to rent or have a roommate is important in an environment where there just aren’t that many small homes for sale,” Fairweather said, referring to the current shortage of affordable housing on the market.
