- More than half of Gen Z is saving to buy a home within the next five years, according to a Bank of America report.
- Gen Zers are driven to become homeowners mainly because they want to start a family or build more wealth.
- Gen Zers are more likely than millennials to ask for financial help from their parents to buy a home.
- Visit Business Insider’s homepage for more stories.
Homeownership is as much a part of the American Dream as ever.
According to a Bank of America report, many members of America’s youngest adult generation, Gen Z, not only aspire to become homeowners before age 30, but they’re already saving for it.
The survey defined Gen Z as ages 18 to 23 and millennials as ages 24 to 40. Fifty-nine per cent of Gen Z respondents said they want to own a home within the next five years and 33% said they want to buy a home, but are waiting at least six years to do so.
Of the prospective buyers, 52% said they’re already saving money. Gen Zers list their top reasons for buying a home as starting a family (59%), building wealth over time (47%), and making their family proud (33%).
How much would a home cost you right now? Find out with these offers from our partners:
A previous Realtor.com study found that Gen Zers were twice as likely as previous generations to be saving for a home by age 25.
“Gen Zers don’t just want to become homeowners; they want to do it at a younger age and we found that they’re saving or planning to save for it accordingly,” Danielle Hale, Realtor.com’s chief economist, said. “Their desire for homeownership may be similar to that of millennials and Gen Xers, but graduating into one of the best labour markets in generations might give them the boost they need.”
Attaining homeownership may be easier for Gen Z than generations before it. As Business Insider’s Hillary Hoffower reported, two historic events – 9/11 and the Great Recession – shaped the way Gen Zers manage their money today. They’re practical and conservative with their spending and are reaching financial milestones sooner than millennials did while trudging through a sluggish economy.
Gen Z still has student loan debt, but it doesn’t seem to be a major deterrent to homeownership. An INSIDER and Morning Consult survey found that while 55% of Gen Z respondents (defined as ages 18 to 21) have student loans totaling $US25,000 or less, 35% of total Gen Z respondents are currently saving to buy a home.
But Gen Zers are aware their biggest challenges to becoming a homeowner are financial, according to the Bank of America survey – namely, saving money for a down payment and closing costs and having enough to cover monthly homeownership expenses.
But aspiring Gen Z homeowners aren’t afraid to ask for outside help, according to the Bank of America survey. Twenty-one per cent of Gen Zers are confident they will receive financial help from their parents to buy a home, while only 14% of millennial respondents said the same. More than half of Gen Zers said they’d be willing to pay their parents back, to boot.
The survey also revealed that some Gen Zers are so determined to own a home that given a hypothetical $US5,000, they’d more likely put the money toward a down payment savings fund than spend it on a dream wedding, shopping spree, or vacation. They’d also be willing to get a second job or choose to attend a college that would leave them with less debt.
Find out how close you are to affording a home with this calculator from our partners:
Business Insider Emails & Alerts
Site highlights each day to your inbox.