If you want to get a glimpse of future housing trends, just ask a member of Generation Z. At 69 million members strong, Generation Z is one of the largest generations of Americans.1
This generation of teens and 20-somethings tends to be digitally savvy and is largely aware of the challenges they face in buying a home. Gen Z’s desires could significantly affect housing demand in the years to come, and professionals in the construction and real estate industries would probably benefit from getting in tune with their needs.
If you’re a first-time home buyer, Newrez offers mortgages that may make your homeownership experience a little easier. See if you qualify for a loan with a low down payment, or one with flexible credit criteria. Not sure what you need? Find out what you can afford.
Who is Generation Z?
While there’s no official timeframe, generally Gen Z includes anyone born between 1997 and 2012 – as of 2024, the oldest “Zoomers” are 27 years old.1
Gen Zers currently make up just 3% of home buyers in the U.S., according to a 2024 report by the National Association of Realtors®.2 However, as this generation continues to enter adulthood, their sway on home trends may increase.
Can Gen Z Afford to Buy Homes?
Zoomers face challenges in the housing market. While some Gen Zers might have been able to snag a home in 2020 when mortgage rates were historically low, many are now confronting mortgage rates hovering just below 7%.3
Additionally, more than half of this generation is currently living paycheck-to-paycheck, and a down payment on a home might seem out of reach.4 Many Zoomers could be weighed down by student debt, or live in areas with limited housing supply. These factors might explain why more than half of adults aged 18 to 24 are choosing to continue living with their parents.5
Here's the good news for Gen Z: Many young adults are finding ample home buying opportunities in more affordable markets like Salt Lake City, Indianapolis, Oklahoma City and Cincinnati.6 Plus, loan options exist for hopeful home buyers who can’t afford a 20% down payment.
Home Features That Appeal to Gen Z Buyers:
The Zoomers who are braving the housing market want their home purchase to align with their personal values and desire for wellbeing, but they’re also searching for ways to save money.
- Home Security Systems
One survey found that 40% of Zoomers expect their first home will have some sort of security system installed before they even get their keys, suggesting that many young adults prioritize personal and property safety.7 Gen Zers also want to be able to control these features from the convenience of their smart phone. - Smart Home Technology
Gen Z was born into the age of the Internet and grew up with digital technology at their fingertips. To many 20-somethings, it only makes sense that their first home would be as digitally savvy as they are. Smart home tech can enable a homeowner to adjust the thermostat, open the garage door, change the lighting, and activate the security system all from their mobile device. - Energy Efficiency and Sustainability
The majority of young adults are extremely aware of climate change, and feel a responsibility toward the environment.4 Gen Zers are likely on the lookout for energy-efficient homes, for both eco-friendly and financial reasons. Features like solar power and sustainably sourced flooring and countertops could appeal to this generation of buyers. - Space for Work and Play
Generation Z is entering adulthood in a time when remote and hybrid work models are more prevalent, so ample office space might be a consideration for young professionals looking to put down roots. Real estate professionals also suggest that many 20-somethings value flexible open floor plans and outdoor spaces with aesthetic appeal– areas where young homeowners can unwind and enjoy themselves.8 - Affordability
While Zoomers are dreaming of their perfect home, they’re awake to the reality that buying a home is a sizeable investment. More than half of this generation worry that they won’t be able to afford a home.7 Gen Zers have employed cost-saving strategies like shopping in affordable markets and buying smaller homes than older generations.9
Tips for First-Time Home Buyers
When buying a home, it’s crucial to get clear on your priorities – what is a must-have versus something you’d be willing to compromise on? Are you set on living in a particular neighborhood, or is the age and size of your home more important to you? Or you might consider buying a fixer-upper home and funding renovations with a mortgage designed for that purpose.
Buying a home is a big step, but it can be broken down into smaller steps. Start out by finding out what you can afford. Unsure if you’re ready to buy a home? Use our Rent vs. Buy Comparison calculator to see what makes sense for you. Finally, don’t forget that Newrez offers a wide range of loan options to meet your needs.
National Association of Realtors® is a registered trademark of the National Association of Realtors and is not affiliated with Newrez LLC.
References:
1 Generation Z in the United States - statistics & facts | Statista
3 30-Year Fixed Rate Mortgage Average in the United States | FRED | St. Louis Fed (stlouisfed.org)
4 How Gen Z is Redefining Homeownership in 2024 (insightsinmarketing.com)
5 How many Gen Z adults live at home? More each year, US census shows (usatoday.com)
6 Here’s Where Gen-Z Is Looking to Buy Homes - The New York Times (nytimes.com)
7 Gen Z Home Buyer Report: 2024 Edition | Clever Real Estate (listwithclever.com)
8 14 real estate trends Gen Z buyers are looking for - HousingWire
