The Zillow Home Price Expectations Survey revealed that 15 years from now, Gen Z will find a much more favorable market as they age when compared to millennials.
Millenials at the peak of the generation curve will be turning 40 in 2020, lived through a 10-year period of turmoil and strain in the housing market. From having to plod through the slow recovery from the Great Recession to navigating the effects of the affordability issues raised by the rising home values during that season, the homeownership rate within this age bracket declined.
Zillow states the homeownership for those between 35 and 44-years-old fell from 66% to 60% since 2009. Additionally, panelists agreed that the homeownership rate among Gen Z homebuyers will increase by 2035 when the oldest Gen Z members will turn 40.
Thirty-five percent of those surveyed said the homeownership rate of those currently aged between 35 and 44 will be lower by 2035.
America’s homeownership rate has climbed to 64.8%, bringing it up to par with recent years’ peaks. However, the market is still a far cry from its heydey, when homeowner rates reached nearly 70% in 2004.
The reasons given by experts for why millenials had such a hard time taking the leap to homeownership, thus opting for continuing to rent, came down to numerous factors. Some of the major issues facing millennials are record levels of student loan debt and the lack of down payment assistance from parents who were unable to help since their own home equity had been highly impacted by value erosion.
These factors—the preference to own instead of rent and student loan burdens—will remain key elements in shifting the tides of the coming homeownership rate trends, according to experts, yet there is still no consensus among them as to which way the tides will flow.
A majority of the panelists did predict that home values will grow 2.8% in the coming year, which is a much more optimistic outlook compared with the 2.5% expected growth for 2020 that was predicted from last year’s survey.