The Commonwealth Blog

Monday, December 11, 2017

When Will Generation Z Enter the Housing Market?

While there have been many studies written about millennials and their low homeownership rates, the focus is shifting to the younger Generation Z and their aspirations for homes of their own.

According to one survey, 82% of Gen Z-ers believe owning a home is the most important part of the American Dream. They’re also confident that they’ll be able to achieve this goal, even though most of them are still in high school or college right now. That’s very different from the confidence rates of millennials, many of whom were disillusioned from the financial crash of 2008 and are more cautious about their goals.

What is Generation Z?

Gen Z includes those born in the late 90s and early 2000s, and they are the generation that immediately follows the millennials. This cohort outnumbers millennials by around 1 million and will soon become a major force in the job market and real estate marketplace. While it’s too soon to tell at what age the average Gen Z-er will be able to afford the homes they value and want, professional builders and Realtors are taking notice and readying themselves for potential new buyers.

Enthusiastic and Optimistic

Despite the knowledge of the subprime mortgage lending crisis, low wages, and a competitive rental market, Gen Z-ers remain optimistic. Time Magazine reports that 97% of the cohort aspire to own a home. For this generation, who took a different lesson from the 2008 housing crisis, stability is vital. These teens are learning more financial information from school and their parents, and they hope to achieve their dream of homeownership by the age of 28.

Only 65% of current Americans own a home, and millennials are renting in droves, but that is likely to change in the next decade. With half the post-college credit card debt of millennials, an enthusiastic attitude, and a lower countrywide unemployment rate than we’ve seen in years, Gen Z might be able to pull off a coup and become the largest generation of homeowners since the Boomers. Gen Z’s interest in homeownership could result in renewed homebuilding efforts, more sales for Realtors, and a revitalized economy.

Hope for the Future

A future with financially responsible adults is something we can all hope for from Generation Z. As they save for college and their futures and create stable lives for themselves, they’ll contribute to the overall health of the economy. Realtors should ready themselves for the arrival of this next home buying generation, as they may be entering the real estate market sooner than we think.

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