September 17, 2021 | by Guest Posts
Categories: Homeownership
This is a guest blog post by Aubrey Anderson, a freelance blogger focusing on housing market trends and technological innovation. She enjoys exploring how generational characteristics impact trends.
This original study is provided by RocketHomes.com, a website that allows people to search for their dream home and to connect with the best home buyer resources for their needs.
While millennials have been considered the generation of perpetual renters, it appears that Generation Z does not plan to follow in their footsteps. In a new study from Rocket Homes, 86.2% of Gen Zers ages 18-24 have their sights set on homeownership, while 45% of this group plan to own a home in 5 years’ time.
While this might seem like Gen Z has an overly optimistic outlook, the data shows they know they have their work cut out for them and see multiple potential challenges on the horizon but also very real rewards.
Almost half of Gen Zers who want to buy a home are looking to become homeowners in 5 years, but what is driving this dream of homeownership? The top reason is they want to start a family with 27.2% citing that as their priority. This is followed closely by those seeking the freedom a home affords them (25.5%), and those who view homeownership as a wealth growing opportunity (13.2%).
Financial responsibility is something older Gen Zers are already practicing. Of the respondents, 74.6% are routinely saving, with almost 10% specifically saving for a down payment. Additionally, many Gen Zers are saving for an emergency fund (20.3%), saving just to save (14.3%), and saving to pay off debt (11.3%). These actions will put them in a better financial position earlier in life and set them up to enter the home buying market when ready.
Though the ambitious timeline for Gen Z home purchases may make their future look bright, they are mindful that the journey will not be easy. When asked what would make buying a house the most difficult for them, 73.9% replied financial constraints. Here's a breakdown of their anticipated obstacles:
But there’s an additional constraint that Gen Zers may not be aware of – they underestimate the cost of a home. Gen Zers on average estimated the cost of their first home would be $223,468, but according to the Federal Reserve Bank of St. Louis, the average home in the U.S. costs $363,300 as of June 2021.
The good news - Gen Zers have choices to help them alleviate some of the problems ahead. Programs and grants are available to make homeownership be more affordable, such as TSAHC’s Down Payment Assistance and Mortgage Credit Certificate programs. Since Generation Z has such a strong desire to purchase a home, we can expect these resources to continue to be in high demand in the coming years.
On the House blog posts are meant to provide general information on various housing-related issues, research and programs. We are not liable for any errors or inaccuracies in the information provided by blog sources. Furthermore, this blog is not legal advice and should not be used as a substitute for legal advice from a licensed professional attorney.
TSAHC reviews all blog comments before they are posted to ensure a positive experience for our online community. Off-topic comments; hostile, derogatory or deliberately insulting comments; and comments specifically promoting goods and services will not be posted.
Approved comments will be published in their entirety. Personal information will not be removed unless it pertains to someone other than the person submitting the comment. For more information, please see our Comment Posting Guidelines.
To remove a previously submitted and published comment, please contact Anna Orendain at [email protected].
If you have a question regarding any of TSAHC's programs, please contact us.
