Much has been said about millennials and their wants and needs in the housing market, but Generation Z (ages 18-24) appears to already be planning for homeownership more than other generations. A realtor.com survey found this upcoming generation is twice more likely than previous generations to be saving or plan to save for a home by age 25. In fact, two of five aim to become homeowners by that age.
The online listing website of the National Association of Realtors surveyed 3,372 Americans across Generation X (ages 35-50), millennials/Generation Y (ages 25-34) and Generation Zers to better understand the generational differences in relation to homeownership and aspirations.
“It’s good to know that we have a young generation that values homeownership and is saving or plans to save for their first home earlier than previous generations,” said Bill Moody, president of the Silicon Valley Association of Realtors. “If they stick to their plans, they will most likely be more prepared for the responsibilities that come with homeownership and reap its benefits at an earlier age.”
Like the generations before them, Generation Z aspires for homeownership, though 79 percent of this group is certain they want to (or already do) own a home, compared with 82 percent of Gen Yers and Gen Xers. Only 4 percent of Gen Zers are sure that they don’t want to own a home, on par with Gen Y (5 percent) and Gen X (6 percent).
A larger share of Gen Zers says they may be interested in pursuing homeownership sometime in the future (17 percent), compared with millennials (13 percent) and Gen Xers (11 percent). Gen Zers who desire homeownership are more than twice as likely to have started or plan to start saving for a home before age 25 (74 percent), compared with what Gen Y (33 percent) and Gen X (33 percent) actually reported accomplishing.
The expenses associated with homeownership are the biggest deterrent for all generations, especially for Gen Zers (48 percent), compared to millennials (31 percent) and Gen Xers (42 percent). The second most-cited reason Generation Z didn’t want to be a homeowner was that they were not yet ready to settle down in one place (25 percent).
Generation Z is least likely to become or plan to become a homeowner for investment purposes (29 percent) or tax benefits (16 percent). This generation cites wanting to customize their space (61 percent) as the top reason for homeownership, and tied with millennials for wanting to raise their family in a home they owned (55 percent).
Gen Zers are more optimistic about receiving financial assistance from their parents to reach their homeownership goals — 56 percent said “maybe” or “yes” to expecting or receiving financial help from family. Gen Xers were least likely to expect or have received help from their family, as 59 percent said no. Millennials are split down the middle with 50 percent no, 50 percent yes or maybe.
With a head start on savings and potentially greater access to family support, this up-and-coming generation could be better prepared to invest in real estate.
Information provided in this column is presented by the Realtor members of the Silicon Valley Association of Realtors at www.silvar.org. Send questions on any topic to rmeily@silvar.org.
