A recent analysis by Zillow sheds light on the migration patterns of Generation Z individuals, revealing a trend that challenges conventional notions of housing affordability as the primary driver of relocation decisions.
Despite California experiencing the highest outbound migration among all out-of-state movers, the Golden State remains a magnet for Gen Z interstate migrants. Zillow's analysis of the U.S. Census Bureau's 2022 American Community Survey found that nearly 44,000 Gen Z adults moved to California from other states, contributing to a net positive gain for the state.
However, California isn't the sole destination for Gen Z movers seeking new opportunities. States like Washington, Colorado, and Virginia, known for their relatively higher costs of living, also saw significant Gen Z net migration. These states, despite having minimal or negative net migration among all movers switching states, attracted Gen Z individuals in search of job prospects and lifestyle amenities.
The analysis further reveals that more than three-quarters of Gen Z adults relocating to these states are renters, despite the higher rental costs compared to the national median. This suggests that factors beyond homeownership affordability, such as career advancement and quality of life, are driving their decisions.
"Compared to all interstate movers, Gen Z adults who moved to California, Washington, Colorado or Virginia were more likely to have a four-year college degree, more likely to be serving in the military, and more likely to work in tech, ACS data shows," Edward Berchick, a principal population scientist at Zillow said. "Gen Z movers are likely drawn to the job opportunities in these states, despite the higher costs of housing. They may also be in a stage of life where they're willing and able to be flexible in their standards of living while starting their careers."
Texas emerged as the top destination for Gen Z movers too, followed closely by California and Florida. In contrast, Michigan, Maryland, and Idaho experienced the lowest Gen Z net migration, with Michigan being the only state where more Gen Z movers left than arrived.
Zillow's analysis defines Gen Z as individuals born between 1996 and 2004 and excludes temporary moves of college students from the statistics, providing a clearer picture of long-term relocation trends among this demographic.
A recent survey by Finlocker found that nearly 56% of Gen Z respondents admitted that they aren’t actively managing their finances.
“The biggest finding year-over-year was overall the survey told us that this particular cohort is very much thinking about ultimately owning a home,” Brian Vieaux, FinLocker’s president and chief operating officer told NMP magazine. “Where ultimately, that was not as much evident in last year’s survey.”
Learning about Gen Zers’ short- and long-term financial goals was a key area in the survey. The top priority of being financially free came with a desire for financial education, unlike last year’s findings. Other priorities identified were paying off student loans, car loans, and credit card debt. The survey also included that the average Gen Zer is just shy of $21,000 in debt.
Finding a market in Gen Z clients for mortgage might be challenging, but surveys show that homeownership is a significant short-term and long-term goal.
