Gen Z wants to achieve homeownership by the age of 30. And this isn't just a pipe dream. According to Bank of America's 2019 Spring Homebuyer Insights Report, more than half of prospective Gen Z (those in the age group of 18 to 23 years) homebuyers are already saving up to achieve their American Dream.
While the reasons for owning a home are many, Gen Z is also realistic about the challenges they're likely to face in their quest, according to the survey. Saving up for a down payment was a major barrier for Gen Z with 66% of respondents listing it as a top challenge to buying a home. Yet, this number was lesser than millennials (69%), Gen Xers (72%), and baby boomers (74%).
Gen Z also found covering major housing costs (58%) and lacking knowledge about where to start (52%) as major barriers to homeownership.
Among the reasons cited by them to own a home, 55% of Gen Zers said they wanted to own because they would be starting families, while 47% cited building their wealth over time as a key reason.
“It’s exciting to see Gen Z wanting to own a home for reasons like building their personal wealth over time,” said D. Steve Boland, Head of Consumer Lending at Bank of America. “Despite their young age, this group is pragmatic and actively planning for their future. They recognize buying a home isn’t easy and have a clear vision not only about where they plan to get help but also how they are willing to help themselves in order to make it happen.”
Despite seeing it as a barrier, Gen Z respondents said that they were willing to sacrifice to afford that down payment. When asked what they would do with $5,000, a majority of Gen Z respondents said that they would save that money towards a down payment for a home.
And they're also more willing to ask for financial help. According to the survey, 61% of this generation said that they would ask for help compared with 54% millennials and 49% Gen Xers. What's more, they're also more willing to pay back for this help. The survey found that more than half of Gen Zers who think they’ll receive help also think they will need to pay their parents back, compared to 40% of millennials.
To save for their dream property, Gen Zers are also willing to make sacrifices the survey revealed. It found that they were willing to cut back on extra curricular activities, get a second job, and attend a university that would leave them with less student debt. Gen Zers were also more willing to move in with their parents or in-laws if it meant saving up for a home.
Click here to read the full Bank of America survey findings.