ServiceLink's State of Homebuying Report found that Gen Z and millennials are undeterred by high mortgage rates and lower incomes and are buying up homes.
ServiceLink's latest report sheds light on the housing aspirations of younger demographics, showcasing their enthusiasm to navigate the current market conditions. Despite facing relatively high mortgage rates and lower income levels, Gen Z and millennials are eager to take the leap into homeownership this year.
“This is an interesting and pivotal moment in the housing and mortgage industries as the younger generations are not only determined to buy but are seemingly undeterred by the higher price tags and interest rates,” ServiceLink President of Origination Services Dave Steinmetz said. “Our study suggests that Gen Z and millennials are poised to impact the market in several ways including purchase, refi and home equity, which is an opportunity for lenders to educate and usher these younger buyers through the process.”
Key findings from the report indicate a strong eagerness among younger generations to purchase homes in 2024, with notable optimism about the housing market conditions.
Sixty-three percent of Gen Z respondents and 59% of millennial respondents said they plan to purchase a home this year (compared to 45% of Gen X and 21% of baby boomers).
The report also found that despite typically having lower incomes, the youngest generations are more willing to pay higher future interest rates than their older counterparts. Gen Z homeowner respondents-- with an average current interest rate of 5.4% --would consider going as high as 6.3% in 2024. (Compared to millennials, with a current interest rate of 5.2%, who would consider 6.2%; Gen X, with a current interest rate of 5%, who would consider 5.8%; and baby boomers, with a current interest rate of 4.6%, who would consider 5%).
The report also found that 27% of all respondents said they would consider refinancing to get a better mortgage rate, while 22% said they would refinance to make home improvements, followed by 16% who said they would refinance to pay down debt. Despite market complexities, a significant percentage of respondents who previously considered buying a home intend to try again in 2024.
The widespread adoption of mortgage technology across all generations underscores the evolving landscape of the homebuying process, with convenience and time savings being key drivers for its popularity.
