Photo: Robert Clark
Look out, US housing market — here comes Generation Z.
Millennials may dominate the first-time buyer market at the moment, but an overwhelming majority of Gen Zers are reportedly planning on buying their first home within the next five years, according to a recent survey conducted by the listing site PropertyShark.
“Raised by the cynical Gen X in a connected world with significant social, political, economic and environmental challenges, the first fully digital generation in history sees homeownership as a long-term investment and safety measure,” reads the report.
Some 83 per cent of Gen Z respondents said they planned to buy in the next five years. Like Millennials, most cited college debt as their primary obstacle to homeownership.
“Considering that the oldest of Gen Z are barely 23, it is noteworthy that a whopping 83 percent see themselves entering the real estate market within 5 years,” reads the report.
Currently, only about 100,000 Gen Zers are homeowners but they view the very idea of homeownership as American as apple pie.
Most Gen Z respondents claimed that homeownership was the most important part of the American dream, with more than 75 percent saying they would be willing to forego running their own business to buy their own home.
“Low wage growth will remain an issue for Gen Z buyers but one major advantage Gen Z has over Millennials however, is that they are entering a job market that is markedly healthier than the one Gen Y found itself in,” real estate writer and author of the study Eliza Theiss tells Livabl.
Gen Z shares many preferences with the Millennial generation. Both prefer large urban centers, communal amenities and high-tech smart appliances.
“Of course, the high numbers of the Instagram Generation who see themselves becoming homeowners in the near future may be attributed to youthful optimism and lack of knowledge, but that’s not necessarily the case,” reads the report .
And while Gen Z is willing to compromise on almost anything to keep costs down, Millennials are more realistic about their means — but more pessimistic about the prospect of homeownership.
Gen Z dreams of a home with over 2,000 square feet of living space — 200 square feet larger than their Millennial counterparts — but in reality can only afford about 800 square feet.
“When asked what they would be willing to compromise on when buying a home, space was the least likely aspect for Gen Z respondents to give up, which is understandable considering that the overwhelming majority of this generation grew up in larger homes than any before, with many never having shared a bedroom,” reads the report .
Even though about a third of both Millennial and Gen Z respondents expect to pay more than $50,000 for a down payment, it’s Millennials who are most pessimistic when it comes to homeownership.
Millennials expect they’ll need $41,0000 on average for a downpayment — about 10 percent more than Gen Z.
Gen Z has a particular affinity for suburbia, with nearly 60 percent of respondents reportedly preferring it over urban living — which could be bad news for small town America.
“Paired with Millennials’ shunning of rural and small-town life, all signs point to the continued urbanization, while rural and small-town communities continue to thin out and vanish,” reads the report.
Similar to Millennials, New York City was the top destination for potential Gen Z homebuyers, as was the state of California.
For the study, PropertyShark surveyed 2,134 U.S. renters, owners and people living with family via Amazon’s Mechanical Turk.
Respondents were asked individual questions about savings, home ownership in general, amenity and community preferences, as well as some demographic data — such as employment and marital status.
PropertyShark defined “Gen Z” as those born between 1995 and 2010.
Click here to read the entire report.