Get ready for Gen Z to make a bigger mark in real estate soon. Nearly three-quarters of this age group say they prefer buying a home over renting long-term. About 40% of young adults between the ages of 18 to 25 also say they plan to enter the housing market within the next five years, and they plan to head to the suburbs, according to a new realtor.com® survey of 700 Gen Z respondents who have never purchased a home.
Many Gen Zers are heading into their college years or just beginning their careers. They view job stability as their number one barrier to buying a home, according to the survey.
“Gen Z values homeownership,” says George Ratiu, senior economist at realtor.com®. “However, the oldest members of this generation are just entering the professional stage of life and not yet in a financial position to make a big play as first-time buyers—especially in the current housing market, which is challenging even older generations who have had many more years to save for a down payment.”
Still, this generation appears bullish on housing, and the real estate market should be prepared for millions of Gen Z buyers to “bring a new wave of demand along a similar stage-of-life timeline as the millennial generation before them,” Ratiu says.
More than a quarter of Gen Z respondents say they feel even more strongly about purchasing a home since the pandemic, according to the survey.
Nearly half—or 49%—of future Gen Z home buyers say they envision themselves living in the suburbs. One in three surveyed say they prefer urban city life. Nineteen percent plan to live in a rural area.
A separate study conducted in 2020 from LendingTree showed the top areas that Gen Z is targeting in buying homes so far. LendingTree looked at mortgage purchase requests from consumers aged 18 to 23 from Jan. 1, 2020, to Oct. 1, 2020. The top 10 metros with the most Gen Z consumers requesting mortgages were in:
- Salt Lake City, Utah
- Oklahoma City, Okla.
- Indianapolis, Ind.
- Cincinnati, Ohio
- Minneapolis, Minn.
- Kansas City, Mo.
- Phoenix, Ariz.
- Louisville, Ky.
- St. Louis, Mo.
- Buffalo, N.Y.