Homebuying traits of Generation Z
Generation Z, the post-millennial generation, wants to be homebuyers.
And they want to do it before age 35. According to a recent homes.com survey, 86% of Generation Z, currently aged 18-to-24-years old, want to be homeowners, and 87% of those who want to own a property want to do so before they hit their mid-30s. In fact, nearly half want to buy before they hit 30.
More than 80% of Generation Z strives for homeownership because they want a place of their own, while close to half consider homeownership a good investment. Forty percent want a good home for their pet. Additionally, Generation Z has strong preferences to what kind of neighborhoods they reside in. More than half (58%) said they want to live in a diverse neighborhood, while just 12% want to reside in a non-diverse neighborhood.
This generation also prioritizes being close to work. Seventy-one percent said that’s the most important feature of their homebuying process, followed by closeness to friends and family at 52% and crime rate at 46.3%.
“Generation Z is more multicultural than ever before, with demographics that include the largest percentage of Hispanics and non-Hispanic blacks at 22% and 15%, respectively. Our survey suggests that their preferences will have a substantial impact on homebuying patterns,” said David Mele, president of Homes.com. “That, in turn, may create a new dynamic where diverse communities thrive more than ever before.”
Like any generation, there will be barriers and Generation Z is self-aware about that. The biggest concern for them is making enough money to afford a home, according to 42.3%, followed by saving for a down payment at 20.9%. Paying off student loans, which has long been cited as one of millennials’ biggest barriers to homeownership, is only a concern for 19.6% of Generation Z.
However, Generation Z is lacking some education on homebuying. More than one-quarter said they don’t know what percentage to put down as a down payment, while 26.1% said they believed it was 20% or more. Thirty-seven percent said between 11-19% is necessary. To save for said down payment, the majority of Generation Z expect to save for more than three years, while 8.5% said a year or less is enough time.
“With Gen Z poised to become the next wave of homebuyers, it’s important to look at how their attitudes and behaviors will affect the homebuying process,” Mele added. “The insights provided by this survey can help agents anticipate and prepare for the changes that will occur as this age group begins their home search.”