Despite the struggles of the previous generation, the youngest cohort of American adults are determined to maximize the American Dream.
Almost 6 in 10 of those in Generation Z who are between 18 and 23 right now, want to buy their first home within the next five years according to a new survey from the Bank of America.
Even as Millennials (Gen Y) buyers face affordability issues, the next generation have homeownership in their sights and 71% know what they want from that home.
To make it happen, more than half of respondents said they have already started saving to buy a home.
“It’s exciting to see Gen Z wanting to own a home for reasons like building their personal wealth over time,” said D. Steve Boland, head of Consumer Lending at Bank of America. “Despite their young age, this group is pragmatic and actively planning for their future. They recognize buying a home isn’t easy and have a clear vision not only about where they plan to get help but also how they are willing to help themselves in order to make it happen.”
Down payment is more important than a wedding or vacation
The BoA Homebuyer Insights Survey also reveals that 80% of Gen Zs prioritize saving for a down payment over saving for their dream wedding, 76% rank it above a spending spree, and 71% say it’s more important than a vacation.
Such is the desire for homeownership, that almost half are willing to get a second job to boost savings, 34% would choose a less expensive university to curb student loan debt, and 32% would move in with their parents or in-laws.
Nearly two-thirds of prospective Gen Z homebuyers think they will receive some financial help to buy, most likely from parents (21%), down payment assistance programs (17%) or other family members (15%).
But more than half of Gen Zs think they will need to pay their parents back.
While this generation of potential homeowners seem to have plans in mind, they also know they face challenges.
They think that saving for a down payment and closing costs is the top barrier to buying (66%) followed by covering the monthly costs of owning (58%) and lacking knowledge about where to start (52%).
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