Step aside, Millennials—there’s a new homebuying kid in town.
Generation Z—those born between 1995 and 2010, so between 9-24 years old today—represent a larger share of the population than Millennials, with their cohort of some 68 million vouching for a quarter of the U.S. population. By 2020, Gen Z will account for 40% of all consumers in the U.S.*
They want to be homeowners
Understanding this group will be critical if you want to succeed in the next decade and beyond—particularly as Gen Z aspires to homeownership: 86% of them want to be homeowners. Of that group, 87% want to be homeowners before they hit their mid-30s. In fact, nearly half want to buy a home BEFORE they hit 30.
What exactly is the reason Gen Z is so interested in homeownership? For 80% of them, it’s because they want a place of their own. Almost half consider homeownership a good investment. 40% simply want a good home for their pet.
Where they want to live
Gen Zers have some strong ideas about where they want to live, too. The most important feature of their homebuying process is being close to their place of work, with 71% ranking it the most important factor. Next, proximity to friends and family trails behind at 52%. Crime rate forms part of their consideration, with 46.3% listing it as a homebuying factor.
More than half (58%) said they want to live in a diverse neighborhood. That’s no surprise considering the cohort’s make up: they’re multicultural, with the largest percentage of Hispanics and non-Hispanic blacks at 22% and 15%, respectively. It’s predicted that diverse neighborhoods will thrive under Gen Z.
Barriers to homeownership
In the same breath, these potential homebuyers are aware of the barriers to homeownership, with 42.3% concerned that they won’t make enough money to afford a home. An additional 20.9% are worried about saving for a down payment. That could be fueled by a lack of knowledge: 26.1% believe a down payment must be 20% or more, and a quarter just plain don’t know how big of a down payment is required. Regardless, the majority are sure that three years, tops, will be plenty of time to gather the money needed for a down payment.
Strap yourself in for the wave of Gen Z homebuyers. They’re hungry for homeownership and need you to be ready to help them get there.