As they enter prime homebuying years, the members of Generation Z (born between 1997 and 2012) are finding their own ways to achieve the dream of homeownership. Despite accounting for only 13% of mortgage applicants and 3% of buyers, the older members of Gen Z prove persistent - with 26% of those aged 19 to 27 in 2024 owning a home.
Much like their predecessors, Gen Z sees homeownership as a top financial objective. A higher percentage of older Gen Z members owned homes in 2024 than millennials and Gen X did at the same age, facilitated by record low mortgage rates during the COVID pandemic of 2020-2021 which dipped to an enticing 2.65%.
Although prices and interest rates have risen in recent years, Gen Z's drive for homeownership hasn't waned. They've just been innovative in their pursuit. For many of these first-time buyers, saving for a down payment presents a significant hurdle. Solutions include FHA loans with lower down payments and credit score requirements, along with first-time buyer initiatives such as Freddie Mac's Home Possible and Fannie Mae's HomeReady Mortgage.
Banks and local government agencies provide grant programs to aid with down payments, and familial financial assistance remains common with Gen Z. A 2024 survey revealed 36% anticipated using cash gifts from family members for down payments, while 16% planned to use inheritance money.
The generation has also shown an enthusiastic spirit of compromise. More than half of Gen Zers expressed willingness to buy a fixer-upper for a lower price, according to a National Association of Realtors report in 2024, while another survey demonstrated they're open to living in less than ideal areas.
Furthermore, members of Gen Z have exhibited a penchant for cheaper real estate territories like the Midwest and South. As more Gen Zers reach their 20s and 30s, their commitment to homeownership is predicted to invigorate the real estate market, bringing a fresh dynamism to regions where affordable housing is more plentiful.