Gen Z still wants to buy homes. But many would sooner change cities than take on a larger monthly payment.
Nearly two-thirds of Gen Z respondents, 63%, said they would relocate to another city or state to afford a home, while only 19% would increase their housing budget, according to a new survey from NewHomeSource, a new-construction marketplace powered by Zonda.
That suggests younger buyers may be approaching the purchase market differently: setting the payment first, then searching for a location where that payment can buy the home they want.
“The goal of owning a home is still absolutely there for this generation, but they’re approaching it differently,” said Ali Wolf, chief economist at NewHomeSource and Zonda. “Rather than stretching financially to buy as soon as possible, they’re setting clear financial boundaries and expanding their search, often across city or even state lines, until they find the home that fits their budget and lifestyle.”
Thirty-nine percent of respondents said they plan to purchase a home within the next five years. When asked what they would be willing to do to make that possible, 35% said they would relocate to a less expensive area within their state, 33% would explore a different neighborhood, and 28% would move to a more affordable state.
Increasing their housing budget ranked sixth, at 19%.
Most respondents said they would not increase their monthly housing costs by more than $300, and the largest share would be comfortable adding no more than $150.
Location Is Flexible. The House Is Not.
The findings do not necessarily show that Gen Z is prepared to settle for less. Instead, respondents appeared more willing to compromise on location than on the home itself.
A large backyard and a garage were each selected as priorities by 32% of respondents, followed by a pool at 28% and a large kitchen at 27%. Respondents were more inclined to relocate than purchase a smaller home, accept lower-quality finishes, or give up desired neighborhood amenities, according to NewHomeSource.
More than half, 53%, identified the suburbs as their ideal place to live, with the strongest preference for suburban communities offering walkable, urban-style amenities.
“Previous generations often bought a home first and built their lives around it,” said Karyn Bonder, NewHomeSource design trends expert. “Gen Z is doing the opposite. They’re waiting until they have the lifestyle they want, then looking for a home that supports it.”
Nearly half of respondents said they were considering relocating, but affordability was not their leading reason. Lifestyle and quality of life ranked first at 27%, followed by a new job and proximity to family, each at 21%. Affordability ranked sixth.
The survey therefore does not establish that Gen Z buyers are moving primarily because housing costs are too high. It indicates that when price becomes an obstacle to purchasing the home they want, many would prefer to widen their geographic search rather than increase their payment.
Affordability Becomes A Search Problem
For loan originators, that could shift the affordability conversation from “How much can you qualify for?” to “Where can your preferred payment work?”
A borrower comparing several communities may need more than a preapproval based on the maximum available loan amount. The originator may need to model the complete monthly cost across different counties or states, including home prices, property taxes, homeowners insurance, mortgage insurance, association fees, and available assistance programs.
The strategy also places greater value on multistate licensing and referral relationships. An originator who discovers that a borrower can no longer afford the desired home locally risks losing that customer entirely if the borrower begins searching beyond the originator’s licensed territory.
That makes geographic flexibility both an affordability solution and a potential lead-retention problem.
Recent NMP coverage of how originators are getting first-time buyers to the closing table found that successful originators are already moving beyond rate quotes. They are combining down payment assistance, government-backed financing, temporary buydowns, house hacking, and detailed payment comparisons to show hesitant buyers what may be possible.
The NewHomeSource findings add another tool to that playbook: changing the market rather than stretching the borrower.
