Proof that we’re all getting older: Gen Z is starting to buy homes
By Erik J. Martin hroughout recent generations, homeownership has traditionally been strongly valued by most. But since the Great Recession and its aftermath, experts suggest that the desire for younger people to purchase and own homes has decreased. Ask any parent who has, over the past few years, taken in a boomerang adult child with massive student debt and weaker job prospects and they’ll likely testify to this trend. It’s curious, then,
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May 21, 2021
to consider to what extent the newest demographic cohort – Generation Z, born roughly between 1997 and 2012, according to Pew Research Center, making the oldest of this group around 22 years old – will be interested in buying homes. While older Gen Zers still represent too small of a sample size to draw conclusions, it’s informative to look closer at the results of a National Association of Realtors (NAR) study conducted last year, which found that 2% of all home buyers and sellers in 2020 fit
this demographic. “We have seen Gen Z buyers begin to enter the home buying and selling market within the last few years, but they have not seen a large enough buying or selling share to report sufficient data. We expect that they’ll continue to enter the buying and selling market, and we hope that next year’s sample contains a larger share of Gen Z participants,” says Brandi Snowden, director of Member and Consumer Survey Research for the Washington DCbased NAR. She adds that it’s
interesting that younger millennials (those 22 to 30 years old) represented the study’s highest share of first-time buyers at 82%. “As Gen Z buyers begin to enter homeownership, we may see that this younger group begins to overtake younger millennials among first-time buyers and that their desire to own a home of their own becomes their top reason for purchasing a home – similar to 56% of younger millennials surveyed,” notes Snowden. “Gen Z has indicated similar views on homeownership, as
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younger generations were more likely to think that owning is a good financial investment.” Abe Labinjo, cofounder/mortgage advisor for Toronto-based Breezeful, says he’s seen strong evidence that Gen Zers could be in a more financially secure position to invest in property when they’re at an age and budget to buy than many expect; what’s more, they could be more aspirational and driven purchasers than their predecessors. “Many prospective Gen Z buyers seem to have learned from the mistakes of millennials and have quickly recognized the restrictions holding them back from homeownership,” he says. “I’ve found that, rather than planning to invest alongside roommates or partners, as many Gen Yers did to save money, Gen Z buyers are preparing to leave home later and focus less on the amenities local to their properties. This reflects the growing resistance to expensive real estate in high-population areas and suggests that Gen Zers are placing a greater emphasis on assets over lifestyle.” Put another way, Gen Z may be more financially savvy than many anticipate. Still, don’t expect this group to start shopping for homes in large numbers anytime soon, per Steve Laret with the Steve Laret Team of Vanguard Realty Alliance in West Chester,
Pennsylvania. “I would look to Gen Z buyers to make purchases later in life than the historical norm. The pandemic of 2020 has forced students to return and remain home, quarantined with their families for an extended period,” Laret notes. “As a result, many Gen Zers have and will become dug in and complacent, I believe.” Debbie Remington, broker/owner of Remington Team Realty, LLC, in Alvarado, Texas, agrees. “It’s not surprising that the 22-andyounger crowd haven’t yet entered the housing market en masse. In fact, many who may be considering purchasing their first home could well be afraid of the limited housing inventory that most markets are currently experiencing,” she cautions. But as Gen Zers settle into careers and family, Remington and others expect an increased interest in owning versus renting. That’s when millennials may finally begin to take a back seat to the subsequent generation and all eyes will be firmly focused on those primarily born in the first decade of the 21st Century. And when that happens, chances are that Gen Yers, Gen Xers, and Boomers will feel the weight of their advancing age all the more. 5
