Millennials are often touted as getting the short stick when it comes to the housing market.
Over the housing boom of the last two years, many Millennials who recently reached prime homebuying age started looking to buy their first home. But high competition and limited inventory have made this a notoriously difficult market for first-time buyers.
This has been intensified by rising home prices. As of 2021, the average millennial with a mortgage owed $255,527 in mortgage debt, up 10% from the 2020 average and 16% from 2019.
But while Millennials may be the largest buying cohort right now, Gen Z is right on their heels.
Gen Z places much stock in the value of owning a home. Nearly 60% of Gen Z respondents to a Bankrate survey associated owning a home with “achieving the American Dream,” and only 9% said they never wanted to own a home.
Zoomers are only beginning to reach college age, but they are moving quickly to make their homeownership dreams come true. Responding to a Radian survey, 43% said they plan to buy a home within the next five years.
They favor the freedom of owning a home, citing the ability to customize their space as a major reason for wanting to buy.
Zoomers are most interested in detached, single-family homes with open concept layouts and outdoor amenities, like a patio or deck.
While they prefer renting in urban areas, 60% say they would want to own a home in a suburb.
Community is important to them, as Gen Z is the most diverse generation. As a result, they want to live in ethnically and racially diverse neighborhoods.
Ultimately Zoomers entering the market now will face the same problems as Millennials. Unless prices moderate and inventory frees up, they will struggle as first-time homebuyers in an environment still breeding competition and high prices.