'Guppies' are the latest real estate phenomenon: young people giving up on ever buying homes

• Navigating the current housing market is proving difficult for first-time homebuyers.
• More Gen Z and millennials are opting out of the rat race and sticking to renting instead.

Starter homes are expensive, so young professionals are opting out of the homeownership game instead of saving to buy a house.

They're called "guppies,'" and they've given up on owning a house. The term, coined by British real estate company Zoopla, is a play on the 1980s phrase "yuppie," which meant a young, financially successful professional. But these would-be buyers have Given Up on Property — putting the GUP in guppie.

In 2023, the guppie represents 42% of adults under 40 in the UK who don't own a home and don't see themselves buying one in the next decade, according to Zoopla. Thirty-eight percent of those adults earn over £60,000 annually.

This mirrors a similar situation in the US, where competition is also heating up between potential first-time homebuyers. Mortgage rates remain close to 7%, and current owners are refusing to sell their houses in favor of their lower, locked-in mortgage rates

Millennials and Gen Zers are being forced to reevaluate as affordable starter homes become a thing of the past. The average age of first-time homebuyers has jumped to 36.

In June the median price for a typical starter home was $243,000, according to Redfin. However, the National Association of Realtors estimated that the price was much higher in July, at $406,700.

Those looking to buy for the first time need to make 13% more than this time last year to afford a starter home in the US.

"Buyers searching for starter homes in today's market are on a wild goose chase because in many parts of the country, there's no such thing as a starter home anymore," Redfin senior economist Sheharyar Bokhari wrote in a blog post.

Instead of stressing over down payments and mortgage rates, guppies are comfortable renting for the foreseeable future even though they're making good money, MarketWatch reported.

A 21-year-old telecommunications worker earning between $80,000 and $100,000 in California described his search for a home around $300,000 in Sacramento as "a semi-depressing struggle," according to MarketWatch.

Do you consider yourself a guppie? Have you given up on the idea of owning a home one day? We want to hear from you. Email this reporter at jhart@insider.com.