Throughout the decades, younger generations typically set their sights on achieving key milestones, which might include building an independent life, exploring and getting underway with a career, and eventually, buying a home.
Today, disruptions from the ongoing pandemic, a rollercoaster ride in the real estate market, rising prices for goods and services, student loan debt and other economic forces make it easy to assume that dreams of homeownership are unattainable to younger generations.
To dig deeper, a recent study by Rocket Homes sheds some light on younger generational aspirations when it comes to homeownership.
The Rocket Homes survey of over 1,400 adult members of Gen Z (ages 18 – 24) finds that 86.2% have already set their sights on homeownership.
As the report notes, Gen Zers are aware of the obstacles that hinder their ability to become homeowners, but despite them, they have plans to buy their own home. However, the study finds that the greatest obstacle in Gen Zers’ way may often be unrealistic expectations.
Who is Generation Z?
Most sources cite Generation Z as born between 1996 and 2021, so today the older Gen Z’s are in their mid-twenties.
The number of Gen Z members in the U.S. is estimated at 61 million. They now account for 40% of consumers.
With Gen Z now coming of age, understanding motivations around personal finances and homeownership is of timely interest.
Gen Z Goals and Finances
The Rocket Homes study found that adult-aged Gen Z believes in the American Dream of homeownership. Nearly all of survey respondents, 97%, hope to own a home in the future.
Yet additional survey findings reveal their current financial picture might make it a challenge to achieve the dream.
A quarter of Gen Zers (25.4%) do not contribute to their savings regularly.
Of the 74.6% who are routinely saving, most are doing so for reasons other than purchasing a home. The main reasons Gen Z reported saving were for an emergency fund (20.3%), nothing in particular (14.3%) and paying off debt (11.3%).
While data indicates that the majority of the generation looks to the future, it appears that their dreams of homeownership may still be too distant to encourage them to take practical steps towards achieving it. Only 8.3% of Gen Zers who are actively putting money away each month said they’re saving for a down payment on a home.
Guidance Along the Way
This study reminds us again that pursuing the dream of homeownership is intrinsically related to each person’s overall financial health and wellness.
First-time buyers, or those planning to someday purchase a home, don’t have to go it alone.
Our certified housing experts can prepare Gen Z buyers, or any first-time buyer, with the knowledge and tools to make the best decisions. This includes information on preparing to purchase a home, improvingcredit scores in advance of applying for a mortgage, how to access down-payment assistance, affordable loan programs, and many other key steps to help make home purchase and sustaining a mortgage successfully a part of long-term financial health and wellness.
Gen Z and Beyond
For Gen Z, homeownership is changing and it pays to understand new rules and opportunities. HUD-certified counselors at non-profit agencies like 995HOPE serve as an advocate with the new homebuyer’s best interest in mind.
It’s important to keep in mind that the oldest members of Gen Z are young adults, certainly an aspirational time of life. A good first step in making dreams a reality is setting yourself up for success by working with a housing counselor.
Additional Resource: Rocket Homes’ Gen Z Home Buying