Generation Z has many aspirations and homeownership is firmly among them according to a new survey from realtor.com.
Realtor.com’s previous research (from 2018) reveals that 40% of Gen Z’s say they want to own a home by the time they are 25; the oldest of the generation turned 22 in 2019.
It’s newly-released Fourth Quarter 2019 Generation Propensity Report shows that the generation already make up 2% of mortgages and should grow as they age and earnings potential rises.
But despite their intentions, they face challenges to homeownership dreams from tight inventory – and the previous generation.
"Gen Z is entering the housing market under the radar, but at a projected 65-million strong, they are going to begin making some major waves," according to realtor.com's senior economist George Ratiu. "However, as the young generation launches into homeownership, it is facing strong headwinds, including competition from millennials, many of whom are entering homeownership later in life, and a marketplace largely devoid of entry-level options."
Supply of homes priced below $200K is down 18.1% according to realtor.com’s December stats.
The median purchase price of a home bought by a Gen Z buyer increased to $160,000 and despite increasing their budget by 11% year-over-year, the generation is turning toward smaller Midwestern and Southern markets that boast higher affordability.
The situation is not likely to improve in the near term with the largest group of millennials turning 30 this year and keen to fulfil their homeownership dreams.
That means that Gen Z and Millennials will frequently be competing for their first homes – especially as Gen Z shift their focus to the larger metros that Millennials are also favoring.
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