In spite of current market conditions, Gen Z and Millennials in the U.S. still hold the aspiration of homeownership in high regard and consider it to be a vital aspect of their lives In a new study, RE/MAX reveals the sentiments of Millennials and Gen Z toward homeownership in a consumer survey that was just released.
Interest rates, home prices, and inventory levels have all fluctuated in the housing market during the last few years. According to the survey, current market conditions aren’t making potential buyers change their minds about making a purchase. Although they have certain reservations about housing costs, loan rates, etc., some 63% of Gen Z and Millennial respondents say they are interested, eager, and ready to become homeowners.
“Homeownership is still an important milestone, and our survey shows that Gen Z and Millennials are ready to achieve it,” said Amy Lessinger, President of RE/MAX, LLC. “While current market conditions have impacted timelines, this next generation of homebuyers is resolute in their desire to achieve homeownership. It’s up to us as real estate agents to provide them with the right tools and guidance to help them reach their goals of homeownership.”
Gen Z and Millennials are Ready to Become Homeowners
Homebuyers in these generations are ready to purchase a home but “have some reservations”.
- Nearly two-thirds (65%) of Gen Z first-time homebuyers noted they are eager to buy or interested in homeownership but are concerned about:
- Affording upfront costs—such as down payment and closing costs—when purchasing a home (40%)
- Property taxes when owning a home (48%)
- Fewer Millennial respondents (61%) than Gen Z (65%) are eager or interested in homeownership but are concerned about:
- Qualifying for a mortgage—because of credit scores, debt and income challenges (42%)
- Maintenance and upkeep costs when owning a home (54%)
- Fifty-six percent of Gen Z and Millennials are willing to compromise on important factors (e.g., price, location, size, etc.) to become homeowners.
- One-third of respondents said eco-friendly/energy efficient features are most important to have in a home, over technology-enabled features (27%) and outdoor/recreational amenities (25%).
Americans View Homeownership as an Important Part of Life
Gen Z and Millennials continue to view homeownership as an important life milestone.
- Respondents selected the following as their top reasons for pursuing homeownership:
- To provide a stable place for their family to live (66%)
- Have a place to call their own (59%)
- An opportunity to have an appreciating asset (44%)
- For both generations, the most important factors considered when buying a home are:
- Price (59%)
- Location (54%)
- Size (34%)
- Neighborhood safety (33%)
- Mortgage rates (24%)
Millennials are More Confident in Their Financial Readiness
Many respondents are confident in their knowledge of the homebuying process and their financial readiness to buy a home.
- Over half (57%) of Millennials are confident in their financial readiness to purchase a home, whereas just under half (47%) of Gen Z feel the same.
- A higher percentage of Millennials (42%) have started saving for a down payment versus 35% of Gen Z
- More than half (56%) of Gen Z and Millennials are confident in their understanding of key financial terms related to homeownership (interest rates, closing costs, escrow, etc.)
- Fifty-six percent of Millennials and Gen Z reported strong familiarity with the process of obtaining a mortgage
- Gen Z and Millennials are planning to help finance their future home purchases differently:
- Gen Z plan to use their savings (42.8%) to help cover the financing while Millennials plan to use a mortgage (41.7%)
- Just 10% of Gen Z and Millennials plan to have assistance from their families
Buyers Want Professional Guidance When Buying and Selling
Gen Z and Millennials are planning to use real estate agents when buying or selling a home to help guide them through the housing market and homebuying and selling process.
- Nearly two-thirds will use or consider using a real estate agent or mortgage lender to learn about the homebuying process (63%).
- Roughly 90% of respondents noted that they are somewhat or very likely to work with a real estate agent when buying or selling a home.
- Some 59% said having an agent guide them through the process from start to finish when buying or selling was most valuable to them
- Additional ways respondents plan to learn about the homebuying process include:
- Online resources: e.g., real estate websites and news articles (55.4%)
- Family and friends (44%)
- Homebuyer education course (27%)
To read the full report, including more data, charts, and methodology, click here.
The post Gen Z, Millennial Homebuyers Still on the Hunt Despite Market Conditions first appeared on The MortgagePoint.
