Special offer

Gen Z'ers are Starting to Buy Homes. What are Their Must-Haves?

By
Real Estate Agent with Keller Williams Capital Properties DC AB15253

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.

Michael Elliott
Fathom Realty - Burlington Township, NJ
Burlington, New Jersey Residential Sales

These studies always catch my attention, thanks for sharing this info, Lise.  

Apr 20, 2024 05:57 AM
Brian England
Ambrose Realty Management LLC - Gilbert, AZ
MBA, GRI, REALTOR® Real Estate in East Valley AZ

I would love to help gen z'ers purchase a home, it would put a smile on my face seeing a young person on the right path!

Apr 20, 2024 05:57 AM
Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Realtor

Good morning, Lise... at the end of the day, it sounds like GenZers are doing what Baby Boomers did... start small, get a foothold and move up as finances and circumstances allow.

Apr 20, 2024 06:10 AM
Wayne Martin
Wayne M Martin - Oswego, IL
Real Estate Broker - Retired

Good morning Lise. Things have certainly changed since I was a 22 year old graduating from college. As soon as I had the money for a downpayment I bought my first home. Central air and a garage were a must with the full basement as a bonus. Oh the times have changed while interest rates ar about the same. Enjoy your day.

Apr 20, 2024 06:10 AM
Roy Kelley
Retired - Gaithersburg, MD

This is interesting information to share.

Have an outstanding weekend.

Apr 20, 2024 06:58 AM
Carla Freund
Keller Williams Preferred Realty - Raleigh, NC
NC Real Estate Transition & Relocation 919-602-848

Hi Lise, This is great information. I've noticed location has been important to Gen Z buyers. Next is the backyard space then a house they can manage repairs on. I've always been one to point out the age of roof, HVAC and water heater for all buyers and especially first time or single homebuyers. I want them to think ahead and plan for these repairs and replacements. I try to set them up for success. 

I have noticed home sellers not wanting to replace the big things (roof, Hvac, etc) even though its on its last leg. That's a shame because insurance companies are dropping home buyers or just not insuring if the roof is old.

Apr 20, 2024 07:15 AM
Dorie Dillard Austin TX
Coldwell Banker Realty ~ 512.750.6899 - Austin, TX
NW Austin ~ Canyon Creek and Spicewood/Balcones

Good morning Lise,

Very detailed post on Gen Z buyers, what they are thinking, their needs, where they are looking and how they are proceeding in a home buying purchase. They are more pragmatic and willing to live in a smaller space. They are more aware of utilizing their finances to get the most out of what they have. 

Apr 20, 2024 07:25 AM
Will Hamm
Hamm Homes - Aurora, CO
"Where There's a Will, There's a Way!"

Good Morning Lise and thank you for sharing this interesting blog with us here in the Rain.  Have a great weekend.

 

Apr 20, 2024 07:59 AM
Candice A. Donofrio
Next Wave RE Investments LLC Bullhead City AZ Commercial RE Broker - Fort Mohave, AZ
928-201-4BHC (4242) call/text

WOW! I did not realize even 18% were homeowners and under 27? 

Apr 20, 2024 09:46 AM