Zillow believes that most millennials and Gen Zers are enthusiastic about the idea of owning a home and that a good number of them will look to buy one in the near future.
A recent survey on the housing preferences and influences on the younger generations found that three in five are planning to use money they have saved during the COVID-19 pandemic to put towards a down payment on a home. That shows that homeownership remains a strong aspiration even among what has often been called the “rent forever” generation.
Not all younger adults were fortunate enough to maintain employment during the pandemic, and Zillow’s survey found that almost three million millennials and Gen Zers have been forced to move back in with their parents since March 2020. But those who have remained in work have realized some big savings as money they would normally spend on things such as shopping, entertainment and vacations has instead been banked.
Out of 1,200 young adult respondents, 83% said they had saved extra cash since the pandemic began. When asked what they will do with that extra cash, 64% said they would use it for their everyday living expenses, while a sizable 59% said they intend to put some of it towards a down payment on a home.
Zillow Population Scientist Manny Garcia said that many young adults, especially women and black, indigenous, and other people of color, were disproportionately impacted by the pandemic and therefore more likely to lose their jobs and suffer from housing insecurity.
“But during this difficult time many young people say they saved on transportation, shopping, dining out and child care,” Garcia pointed out. “Some who remained employed and saved enough for a down payment were able to join in on the hot pandemic housing market.”
The impact of millennials on the housing market will be felt keenly as they are the largest generational group of homebuyers at present. As more of them reach their peak home buying years, with Gen Z not far behind, it’s important to know what they value most when it comes to shopping for a home.
That was the focus of Zillow’s survey, and it revealed some interesting trends. For instance, 27% of young adults that responded to the survey said they had been inspired by celebrities or social media influencers when making housing decisions. Perhaps surprisingly, men were more likely to report being influenced by celebs and influencers than women were. Around a third of men admitted to this, compared to just 22% of women.
Still, while young adults are influenced by the celebs and social media stars they follow, when it comes to the nitty gritty they mostly end up chatting to mom and dad. More than two thirds (71%) of millennials and Gen Zers said they discussed their housing decisions with their parents, while 61% talked closely with their friends too, the report found. Half of respondents discussed things with siblings, while just 29% took the matter to their grandparents.
Among those younger adults who actually own a home or tried to buy one in the last year, 60% said that their partner persuaded them not to buy a particular property. Another 54% said their parents ended up dissuading them from buying a home they liked.
While the opinions of our friends and loved ones counts for a lot, location is always an important factor too. However, the survey found that young adults are rather split on where they’d like to live. Some 44% of young adults indicated a preference for living in a somewhat or completely remote area, while 36% said they’d rather live in a big city. Around one in five said they had no preference. Interestingly, despite the rise of remote work, 61% of young adults said they’d still want to live in a home that’s close to their workplace, while having a short commute to work was described as either very or extremely important for 63%.
Zillow Communications Director Haley Mills, who is also a recent millennial home buyer, said record low mortgage rates were the main factor behind her decision to buy.
“My spouse and I knew we might not see rates this low again in our lifetime and it allowed us to afford a much larger home without stretching our budget,” she said. “We moved quickly out of fear of missing out on a great home and overlooked details like the number of bedrooms, interior paint color and unkempt landscaping. Those are projects we’re excited to do together to make the house our own, with the help of influencers ad friends to give us all the best design trends and DIY tricks.”
Zillow has previously published research that suggests as many as 6.4 million new households will be formed in the U.S. by 2025 due to a hug wave of millennials wanting to buy their first homes. Millennials are now hitting their mid-to late 30s, so its the ideal time for many to want to own their own place. So far, around one third of millennials and Gen Zers currently own a home.
Zillow Home Trends Expert Amanda Pendleton said the findings of the survey are important because the two generations will drive the housing market or years to come.
“These tech-savvy generations that grew up with the Internet are changing the way we buy and sell homes, demanding new real estate technology that makes the process faster and easier, and makes moving a digital-first experience.”