Generation Z Renters Gearing Up for Homeownership
Generation Z (Gen Z) renters include people born between the late 1990s or 2000s are more interested in homeownership than the preceding generation, the Millennials, according to a new survey. Zillow reports 57% of Gen Z renters are confident they will own a home, compared to 55% of Millennials. The discussion of Millennials delaying homeownership has been prevalent throughout the housing industry. Now with a new demographic of young home buyers vying for starter homes, the housing market might just get more competitive.
MarketWatch reports 55% of Gen Z-ers earn less than $25,000 annually and 82% live with a roommate or family member. This demographic is generally more optimistic about homeownership than their Millennial counterparts, as they were not impacted by the Great Recession. The National Association of Realtors found that despite their propensity for using technology and social media, 81% of Gen Z survey respondents believe they will work with a real estate professional during their home purchase.
A joint study from the National Association of Realtors and American Student Assistance, Millennials are delaying home buying for a median of seven years because of student loan debt. The national student debt total of $1.4 trillion accounts for 35% of all non-housing debt. Student debt is impacting many financial decisions for Millennials. 61% of Millennials surveyed indicated they could not afford to contribute to a retirement account because of student loan debt, 65% reported it impacted their decision to purchase a vehicle and 64% said it influenced their ability to continue with education.
The housing industry is facing limited inventory, especially with starter homes. Realtor.com reports that almost 75% of homeowners over the age of 55 are choosing to keep their current home rather than downsize. Thus, Millennials are struggling to find available homes for sale and the industry has seen a 17% year-over-year decline of starter home inventory. With Gen Z poised and confident to enter the housing market, competition for limited available homes is only expected to increase.
Sources: MarketWatch, MarketWatch, National Association of Realtors