Millennials have been criticized for reaching life milestones later than previous generations, but should they shoulder all the blame? As per our March Insight, this group (born between 1980-1995) is entering prime homebuying age at a time when wage growth has been weak and housing costs have risen rapidly. Still, the oldest millennials – now well into their 30s – are finally easing into the footsteps of their predecessors. Millennials overall have quickly increased their homeownership rate to 36.8%. But the next generation is right on their heels.
Generation Z, the post-millennial generation, is eager to enter the housing market. According to the National Association of Realtors, 97% of Generation Z believe that they will own a home in the future, and 82% believe that homeownership is an important part of the American Dream.
Although Generation Z is early-on in adulthood, they nearly match millennial aspirations for homeownership in the near term. A Property Shark survey reveals 83% of respondents aged 18-23 saw themselves entering the real estate market within five years. Eighty-seven percent of millennials feel similarly.
These numbers may be more than youthful optimism, as Generation Zers appear willing to purchase cheaper homes at younger ages. The survey also found that:
- 47% of Generation Z homeowners paid less than $10,000 for a down payment; and,
- 93% of Generation Z homeowners saved for a down payment for less than five years.
Yet another report from Realtor.com® found members of Generation Z are two times more likely than earlier generations to begin saving for a home by the age of 25. This generation is opting for intergenerational living arrangements at a rate of 40%. Even though 15% of this group could afford to move out on their own, they see greater benefits to living at home and saving up.
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