Meet a New Generation Of Spring Buyers — Gen Z

With Gen Z showing such promise concerning homeownership, let’s get to know this generation better so you can be prepared for this new set of buyers that are moving quickly into the market.

By The Numbers

There are a few key facts to know about Gen Z that can help you understand their wants and needs as a potential homebuyer.

First of all, affordability is critical. Data from both LendingTree and Redfin show that Gen Z is buying homes in more affordable markets. Gen Z buyers choose smaller cities with more affordable housing over large, expensive markets like New York City, Los Angeles, or San Francisco. Their flexibility to choose more affordable markets may be tied to their remote or hybrid work schedules — as many are not bound to a specific location by their jobs.

National Association of Realtors (NAR) data shows that Gen Z purchases the smallest homes, with a median size of 1480 sq. ft. NAR also found that many Gen Zers have opted to stop renting and live with family to boost their savings, like many Millennials have done. In fact, NAR found that 30% of Gen Z homebuyers move directly from their family member’s home to a home of their own.

Assumptions

It’s easy to look at the state of the market and think younger generations may not want to buy, however this is not true. LendingTree found that even though they missed out on low rates, Gen Z is still buying homes. Some of this may be perspective, as some may be unaware of the historically low 2-3% interest rates of the pandemic years. Regardless, given the ages of the oldest of Gen Z, many were simply not prepared to buy any earlier.

While today’s rates are a challenge for many borrowers, some Gen Zers are choosing not to let rates hold them back. Similarly, don’t let your own assumptions hold you back from reaching out to this new generation of potential homeowners.

It’s also easy to assume that, due to age and financial limitations, Gen Z may not be prepared to buy. Again, this is not always true. A tight labor market during the pandemic helped much of Gen Z build their incomes quickly, as wages rose 12% in 2022, double the increase for the overall population, according to a Bloomberg report. Add this to the many Gen Zers who have lived with family to save on rent; many of these young buyers will have adequate savings and income to cover down payments and closing costs sooner than you might expect.

Whether you’re ready or not, Gen Z is making their way into the housing market — and their financial situation looks different from any generation we’ve seen before. To be prepared for your spring homebuyers, be ready to meet Gen Z.