Gen Z Has Grand Ambitions for Homeownership
“These kids today” is how someone might begin a discussion about the young people of the next generation. The funny part is that elders have expressed this type of sentiment about youngsters since the days of the great philosophers of Ancient Greece.
The gap between generations typically narrows as individuals age, with values, perspectives and priorities converging. In some cases, though, the alignment between the younger and more established generations may be stronger than conventional wisdom holds.
Such is the case with Gen Z teens and their views on homeownership. Better Homes and Gardens Real Estate recently conducted a national survey of 1,000 teenagers ages 13 to 17 that revealed that they have traditional dreams despite having being born and raised in a hyperconnected, always-on modern world.
Gen Z is the first generation of individuals who know nothing other than a world linked by social media and made smooth with the conveniences of instant product and service delivery. Members of this generation can rent couture dresses for proms and play video games against opponents on different continents. Their lives are the stuff of their parents’ science-fiction books. Do their values and life views also diverge from their parents'?
The data says no.
Gen Z teens consider themselves financially literate, a characteristic that will serve them well as they mature into working professionals pursuing a place in the housing market.
Fifty-one percent of the Gen Z teens surveyed believed that they know more about saving money when compared with their parents at the same age. Of that group, 65 percent attributed this belief to discussions they’ve had with their parents about saving and 41 percent credited having learned about the economic recession in school.
Sixty-one percent of those surveyed said they are more knowledgeable since they have already begun saving money. And while the teen years are often filled with aspirations and dreams, 54 percent of the respondents said they do not believe they will achieve millionaire status in their lifetime, perhaps an indication of a realistic perspective.
Gen Z teens understand the value of a home literally. Among those respondents who believe they will own a home, they estimated paying on average $274,323 to purchase their first residence. And in fact, that estimate seems to be quite realistic. According to the latest U.S. Census data, the median cost of a home today is $273,500.
Four out of 5 of Gen Z teens surveyed indicated that homeownership is the most important factor in achieving the American Dream. For 89 percent of the respondents, owning a home is part of their interpretation of the American Dream, followed by graduating from college (78 percent), getting married (71 percent) and having children (68 percent).
How much does this dream mean to today’s teens? Findings show that 97 percent of those surveyed believe that they will own a home and are willing to make sacrifices now if it means getting their ideal home in the future. Remarkably, 53 percent said would be willing to give up social media for a year (the same proportion as those willing to do twice as much homework every night). Forty-two percent would go to school seven days a week and 39 percent would take their mom or dad to prom.
Survey results also indicate that Gen Z teens aim to own their first home by age 28 -- three years earlier than the median age of first-time homeowners, according to the National Association of Realtors. These Gen Z respondents do, however, expect to progress through certain traditional milestones before buying their first home like earning an advanced college degree (60 percent), getting married (59 percent), owning a pet (58 percent) and having children (21 percent). Seventy-six percent said they believe they are likely to live with their significant other when purchasing a home versus living alone (15 percent) or residing with a friend (8 percent).
At a young age, Gen Z teens are showing an astute understanding of and stated commitment to housing, as well as the milestones and actions surrounding that transaction. This insight is important for companies as they plan to welcome Gen Z into the workforce and as contributors to the U.S. economy.