The competition for first-time homebuyers is about to heat up. Gen Z is planning on buying a home, according to a report from PropertyShark [1]. According to PropertyShark, 83 percent of of Generation Z, those born after 1995, are planning on buying a home in the next five years.
Like millennials before them, Gen Z’s top obstacle is college debt. Half of the millennials and Gen Z alike are still renters, with student debt holding many millennials back from saving for a down payment.
Gen Z is still set to become the biggest competitor in the housing market for millennials. Currently, millennials are the most likely group to buy a home in the in the next five years, with 87 percent of millennials planning on buying in that time frame. Gen Z is optimistic about home buying, and according to Zillow. There are already around 100,000 Gen Z homeowners, with only 1.2 percent of these young owners 60 days late on their mortgage payments according to data from MarketWatch [2], compared to 1.6 percent of Boomers and Millennials and 2.3 percent of Gen X mortgage holders.
Gen Z’s optimism extends to home size. According to Zillow, when asked what they would be willing to compromise on when buying a home, space was the least likely aspect for Gen Z respondents to give up. Millennials prized location more than anything else, but Zillow notes that Gen Z are more willing to sacrifice an easy commute for space and amenities.
Like millennials, Gen Z is moving to urban areas, however, most prefer suburbs over the urban centers, with 60 percent preferring to move to a suburb and just 30 percent preferring urban areas. This still means millennials and Gen Z alike are shunning the rural and small town life.
Additionally, Gen Z is willing to take on more challenging home purchases, willing to buy fixer uppers if it means buying a larger home at a more affordable price. PropertyShark notes that this may be due to the large number of Gen Z the hardships among older siblings or even parents during the recession years.
Find the full report from PropertyShark here. [1]