Close to 50% of Gen Zers are on the hunt to purchase a home within the next five years, according to Realtor.com. However, as many Gen Zers are either in their college years or just starting their careers in the face of the pandemic's economic uncertainties, job stability is their No. 1 barrier to buying, according to the survey.
Folks between the ages of 18 and 25 are the oldest members of Gen Z. They are in the phase of life where they are beginning to plan for the future and homeownership is a top priority, according to a Realtor.com's survey of more than 700 members of Generation Z who have never purchased a home, via HarrisX.
Many Gen Zers are optimistic despite having gone through the COVID-19 pandemic, with nearly two-thirds (64%) of saying their COVID experience has not impacted their homeownership plans. More than one-quarter of those surveyed feel even more strongly about buying a home as a result of the pandemic, according to the report.
“Gen Z values homeownership. However, the oldest members of this generation are just entering the professional stage of life and not yet in a financial position to make a big play as first-time buyers – especially in the current housing market, which is challenging even older generations who have had many more years to save for a down payment,” said George Ratiu, senior economist, Realtor.com. “With nearly three-quarters of those surveyed preferring to buy versus renting long-term, the housing industry should be prepared for millions of Gen Z buyers to bring a new wave of demand along a similar stage-of-life timeline as the millennial generation before them.”
So why are Gen Zers so keen on purchasing a home? Among the Gen Zers surveyed who prefer buying versus renting long-term, half say owning a home is important to ensuring their family has room to grow into. However, with the vast majority not yet in an established relationship, 40% said now isn't the right time to buy because they don't know exactly what their future housing needs will be, according to the report.
In terms of when aspiring Gen Z homeowners think they'll be ready to buy, 43% say within the next five years. Roughly the same amount (44%) expect to enter the housing market within the next five to 10 years.
Long-term, nearly half (49%) of future Gen Z homebuyers see themselves living in the suburbs and 19% plan to live in a rural area, both of which typically offer more spacious abodes. The remaining one-in-three surveyed prefer urban city life.
“When it comes to where Gen Z homebuyers are deciding to live now and in the future, affordability is key,” said Rachel Stults, deputy editor of Realtor.com. “From exploring metros that offer both jobs and more affordable housing, to saving for a down payment, Gen Z homebuyers know how crucial it is to have a financial leg up when it comes time to buy. If they can learn anything from the experience of the millennial generation before them, it's the importance of laying the groundwork so that they can act quickly on a home in their budget. Prospective buyers should also plan for what they'll do if mortgage rates increase or other housing market conditions change quickly, particularly coming out of the pandemic. In short, whether they plan to buy in two years or 10 years, prospective Gen Z homeowners should be thinking several steps ahead.”
Read more about why Gen Zers are eager to purchase a home in the next five years from the Realtor.com survey.
