In 2025, mortgage rates in the U.S. have slightly dropped to an average of 6.58% for a 30-year fixed loan. While this is lower than the recent peak, it’s still much higher than the record-low rates during the pandemic. Because of this, many homeowners are choosing to stay in their current homes instead of selling and taking on a new, more expensive mortgage—this situation is often called the “golden handcuffs.” As a result, people are focusing more on saving money, investing wisely, and paying down other debts. Buyers are also feeling the pressure of high housing costs and are encouraged to shop around with different lenders. Doing so can save them $600 to $1,200 a year, which helps ease the burden of rising prices in other areas.

Gen Z, the generation born roughly between the mid-1990s and early 2010s, is changing what it means to be financially smart. Facing high living costs, slow wage growth, and an uncertain economy, many young adults are choosing to live simply and save money on purpose—not just out of necessity. For them, being frugal isn’t about being cheap; it’s about spending with intention. Instead of showing off with flashy purchases, they value minimalism, sustainability, and financial security. Gen Z is more likely to skip luxury items and expensive outings in favor of saving for long-term goals, like owning a home or building a safety net. For this generation, living within their means is not a sacrifice but a statement of values.