Roughly two-thirds of Generation Z, born between 1997 and 2012, believe that homeownership is still within reach, despite facing challenges posed by high home prices and mortgage rates, according to a recent survey by Realtor.com®. However, breaking into the housing market is proving to be difficult for these budget-conscious and convenience-focused buyers, with the oldest among them turning 27 this year.
While approximately 18% of Generation Z individuals are already homeowners, according to John Burns Research & Consulting, the majority are not, with nearly half still residing with family. Chris Porter, chief demographer at John Burns, explains that at their core, Generation Z aspires to homeownership, but this milestone is likely to occur later due to the significant challenge of housing affordability.
Generation Z has earned a reputation for being more financially prudent than previous generations, a trait that can be attributed to witnessing their families' struggles during the Great Recession. Moreover, many of these young adults are in the early stages of their careers and typically earn less than their millennial and Gen X counterparts.
Given the exorbitant cost of homeownership, Generation Z is adopting a pragmatic approach by seeking cost-saving measures wherever possible. This practical mindset may explain why owning a large home is not as high a priority for this generation compared to others.
Rather than single-family homes, Generation Z is more open to options like apartments, condos, or townhouses, which are more affordable and easier to maintain. Many are willing to sacrifice features like garages and expansive kitchens in favor of owning their own space, says demographer Porter. They prioritize functional and multipurpose living spaces where every square foot is utilized efficiently.
For Generation Z, their homes often serve as places of work, at least part of the time. Consequently, they are on the lookout for properties with dedicated home offices or quiet spaces suitable for remote work, underscoring the importance of reliable high-speed internet access.
Despite their flexibility in housing choices, there are certain amenities that Generation Z homebuyers refuse to compromise on. According to the John Burns survey, approximately four-fifths of Generation Z individuals insist on having a washer and dryer or central air conditioning, while 61% prioritize having a dishwasher, and half require private outdoor spaces.
Moreover, Generation Z is forward-thinking about potential maintenance costs, such as roof and HVAC replacements, recognizing the importance of avoiding unexpected financial burdens after purchasing a home.
Unlike prior generations, Generation Z is less drawn to expensive urban centers due to the increasing prevalence of remote and hybrid work. This shift has allowed many to pursue homeownership in more affordable, smaller cities and different regions of the country.
Porter notes that remote work has expanded the geographic options available to Generation Z, who prioritize attainability and affordability in their housing choices. While they seek proximity to communal spaces where they can socialize, they also value access to unique experiences outside the digital realm, such as visiting breweries or upscale bowling alleys over the weekends.
Comments(8)