- Gen Z is quickly becoming a major player in the home-buying market.
- The young generation is cost conscious and ready to settle down.
- Gen Z is starting off with better financial footing than Millennials.
Gen Z, occasionally referred to as iGen or Centennials, is the group born between approximately 1997 and 2012. While many in Gen Z are only just finishing college and stepping into the world of work, they are already eager to set down roots. According to this Realtor.com article, these young adults are buying roughly 2% of the houses on the market. The article also states that this is Gen Z’s first appearance on this respected real estate trends report. Gen Z appears to be coming into the home-ownership scene early, strong, and ready for the long haul.
A Financially-Savvy Generation
While this generation is ready for a place to call their own, they don’t necessarily have loads of money. Not yet. They are still young and the oldest are only now in their early to mid-20s. They are more cost conscious, however, than Millennials and Gen X, and are already known for making smart, penny-saving choices. They are moving into less expensive homes in affordable areas. And most of the areas happen to be where they went to college. The most popular for Gen Z buyers is currently Toledo, OH, followed by a few other small cities in the South and the Midwest.
Gen Z: A Step Ahead of Past Generations
The letter Z might denote the end of the line, but this generation is not lazy or indifferent when it comes to financial goals. Gen Z expert Jason Dorsey tells Realtor.com: “Gen Z could leapfrog many millennials financially, as they’re starting out on better footing.” He goes on to say that “Gen Z is more practical with their money than previous generations. They’re better positioned to enter the home-buying market than millennials when millennials were the same age. They’re savers, and they’re looking for stability.” As we develop a picture of Gen Z as consumers, it should be known that they’re sensible and future-thinking.
Less to Invest But Still Committed
While Gen Z is jumping head-first into home-buying, they aren’t putting as much into their down payments. We often hear that 20% is the standard amount to put down for a home. In fact, no generation is putting that amount down, on average. But Gen Z is definitely putting down the lowest, coming in at about 5%. They are determined to be home owners, though, despite the fact that the lower down payment will likely cost them more on a monthly basis and in interest and mortgage insurance payments given the larger amount being financed.
The Financial Future of Gen Z
It’s exciting to see Gen Z emerge as buyers in the home market. We are just beginning to shape a deep, research-based understanding of Gen Z as consumers, and at CGK, we are eagerly researching Gen Z to see what kind of impact this up-and-coming generation will make on our world. Right now we have studies going on about Gen Z and retail payments, workforce, insurance, technology, and much more on multiple continents!
What Role Does Gen Z Play in Your Organization?
How is this young generation of practical future-thinkers relevant to you? If you’d like to find out more about how to unlock their workplace and consumer potential in your organization, contact us here and we’ll set up a call to discuss how we can help. We deliver custom keynote speeches, research, and consulting that solves generational challenges.