If you’re looking for a reason to be optimistic about the future of housing, look no further than Generation Z, the demographic that comprises the youngest potential consumers.
A new survey from Freddie Mac shows that Gen Zers aged 14 to 23 on the whole are more positive about what it means to be a homeowner than millennials at the same age were. Some 86% of Gen Zers want to own a home one day, the survey found.
Gen Zers also hope to buy their first home earlier in their lives than millennials did, the survey found. The vast majority of those in the younger generation said they plan to own a home when they’re 30 years old, which is three years younger than the median age of first time buyers at present. Reasons for wanting to own a home include having more privacy, control and independence than they can have from renting. They also cited having something to be proud of, stability and financial security, the survey revealed.
“The data show that while members of Gen Z clearly aspire to homeownership, they are realistic about potential barriers,” said Freddie Mac CEO David Brickman. “Although these results are good news for the housing market, they also highlight the challenges many in Gen Z will face as they enter the market to rent or buy.”
Those challenges include higher home prices and limited inventories, particularly at the lower price points. Other barriers include saving for a down payment and concerns over employment, Gen Zers say.
“One of the biggest challenges millennials face today is the lack of affordable starter homes,” Freddie Mac Chief Economist Sam Khater said. “Given Gen Z’s desire for suburban medium-sized homes close to urban areas with amenities, demand for entry-level homes will intensify.”
The survey also highlighted some interesting findings, including the fact that although Gen Zers are among the most tech savvy of consumers, most still prefer a face-to-face interaction with a professional when it comes to buying a home. Gen Zers also lack knowledge of mortgages, with 71% saying they’ll ask their parents about the process when the time comes, and another 58% saying they’ll seek the advice of real estate agents.
“It’s clear that many in Gen Z reflect the times in which they have lived,” Brickman said. “They were generally young children during the economic crisis of 2008 but have grown up during a remarkable period of sustained economic growth and prosperity. In general, they are more financially educated and aware than previous generations, and they appear to have a clear understanding of the benefits offered by our nation’s housing market—and some of its challenges.”