Gen Z: What You Need To Know About The Next Generation Of Homeowners
Homeownership is an end goal for many, but the Gen Z generation has taken it upon themselves to go and make this dream a reality. Our previous post entitled Millennials are Buying Houses on Their Own, You Can Too! outlines how 60 percent of millennials “would encourage their younger selves to start saving for a house soon.” While Millennials may be wishing they started early, this doesn’t seem to be the trend for Gen Z.
A change in behavior
Gen Z are getting serious about home ownership, and this behavior is largely due to their hesitancy when it comes to renting. Yahoo! Finance states that more than 80 percent of Gen Z would rather buy a home instead of renting one, thus marking a big shift away from millennials who see rent as part and parcel of their everyday life.
In fact, most Gen Z respondents say they plan to own a home by the time they’re 30. While this may initially seem very unlikely, Gen Z are actually known as one of the most financially savvy generations. Investment News believes this due being brought up in the digital age: “Generation Z is also the best prepared for the digitization of money management and financial services given their ability to navigate new technologies.” With this generation actively looking to take advantage of financial services, this is a key reason why the industry is growing at a rapid rate. Maryville University points out how the number of financial planners will increase by 30% in the next four years. This speaks to the general public’s heightened financial awareness as well as Gen Z being more prepared than Millennials to trust financial planners. As such, the key to finding the best service is to lean on professionals who understand changing real-estate trends. Those who want a home by 30, for example, should be seeking financial assistance early into their 20’s so that the planner can help gauge their potential financial growth.
When we think of owning a home, we often imagine a two or three-storey house with a sprawling backyard. For Gen Z, the stability that comes with owning a home is far more important than the actual home itself. The Financial Brand highlights how Gen Z is much more practical with their finances compared to millennials, and that this practicality can be seen in many aspects of their lives including planning to own real estate.
When it comes to buying a home, some Gen Z even consider making huge financial sacrifices in order to make this goal more obtainable. The “work hard, play less” saying comes into effect here, as some are willing to cut back on frivolous expenses in order to funnel that money into buying a home instead.
Taking out loans
In line with this emphasis on practicality, Gen Z are also more realistic when it comes to seeking ways to fund their mortgage. A report by Housing Wire shows that Gen Z are more likely to take out auto loans and personal loans to help pay for their home. Furthermore, the number of credit-eligible Gen Z customers is expected to grow by 13 million next year. Credit activity is expected to rise accordingly, especially as more Gen Z reach the age where they’re ready to buy a house.
All in all, it seems as though the rest of us would do well to follow Gen Z’s example when it comes to setting financial goals. Getting control of your finances early on is crucial if you want to move from renting homes and apartment spaces to actually buying them.