Much attention has been given to low homeownership rates among millennials, but a new survey suggests Generation Z may turn that trend around.
Bank of America commissioned customer engagement firm Concentrix Analytics to survey 1,919 adults 18 and over who either own a home or plan to buy one, in order to gain insight into the homebuying market. Among prospective homebuyers surveyed between the ages of 18 and 23, 59% said they wanted to buy a house within the next five years, which would make them homeowners before they turned 30.
Not only are Gen Zers dreaming big, but they are putting actions behind their words. Approximately 71% already have an idea of what they want in a home and more than half of those surveyed have already started putting money away for the purchase of a house.
Most Gen Zers—94%—are also willing to make sacrifices in order to achieve the goal of homeownership.
- 48% said they would be willing to get a second job compared to 38% of millennials
- 34% said they would attend a college that would leave them with less student loan debt compared to 15% of millennials
- 32% said they would move in with parents or in-laws compared to 23% of millennials
Those between 18 and 23 were also willing to spend less on other activities in order to build up their savings for a down payment. When asked how they would spend an extra $5,000, 80% of Gen Zers surveyed said they would use it for the down payment rather than for plan a dream wedding. Likewise, 76% said they’d use the money for a down payment rather than go on a shopping spree and 71% said they’d choose saving it for a down payment over spending the money on a vacation.
Most Gen Zers—61%—also believed they would receive some help coming up with money to buy a house, with 21% expecting help from parents, 17% planning to get money through down payment assistance programs and 15% planning to turn to other family members. However, interestingly, more than half of those who expect to receive help from parents plan to pay their parents back compared to 40% of millennials.
Perhaps because they are already taking steps to make homeownership a reality, Gen Zers are less likely to feel hindered by coming up with a down payment and closing costs than other generations. In fact, 66% of Gen Zers say money is the biggest obstacle to homeownership compared to 69% of millennials, 72% of Gen Xers and 74% of baby boomers.
When deciding the best time to pursue homeownership, it’s a good idea to compare the costs of owning vs. renting. If you do decide homeownership is for you, planning early can make the process easier. That way you’ll have more time to stash money away and you’ll be able to identify loans for first-time homebuyers, which may require less of a down payment or provide assistance with closing costs.