Generation Z Fears They May Never Be Able to Afford a Home
Generation Z, also known as "Zoomers", is the demographic cohort of people born between 1997 and 2012, making their age range from 11 to 26 years old. This generation comes after Millennials and before Generation Alpha.
According to a study by Clever Real Estate of St. Louis, 60% of Generation Zers fear they will never be able to afford a home, because an astonishingly high 98% of this age cohort sees significant barriers to home ownership.
Paramount among the barriers to these respondents is the cost of homes in today’s market (50%) and steep interest rates (31%). Currently, just 61% of Gen Z non-homeowners have less than $10,000 saved for a home, which would only cover a 10% down payment on a property valued at $100,000 – and $100,000 is an extremely modest property.
Only 18% of prospective Gen Z buyers believe they can afford a home. A majority of Gen Z (52%) anticipate their first home to cost less than $250,000.
While 92% of Gen Z say owning a home is important, a startling 96% prioritize other goals above homeownership, such as stable employment (51%), building a career (48%), and starting a family (32%).
When asked about their peers, more than 98% of Generation Z homeowners don’t think that the average member of their generation can afford a home. And of those who do own a home, 33% received parental assistance for the downpayment. Also, prior to buying, 31% of these homeowners moved in with their parents to save for their home.
Further, among those who do own a home (33%) have struggled to pay their mortgage, and 1 in 8 (13%) regret that their mortgage is too expensive.
And speaking of regrets, twenty-one percent admitted to not having sufficient knowledge about the home-buying process – they wished they knew more.
Among Gen Z renters, a majority (52%) have struggled to pay rent. Nearly 1 in 5 (18%) cite financial irresponsibility as a barrier to homeownership, and 35% are concerned about qualifying for a mortgage, and are, therefore, renting.
However, there is still some optimism, believing that barriers can be overcome. Despite their challenges and concerns, 90% of Gen Zers remain optimistic, believing they will purchase a home before the current U.S. average age of 35, with 33% expecting to own a home by age 25. And 29% of Zers anticipate owning a home worth over one million dollars at some point in the future.