A new group of young American adults is emerging as home buyers. These are the young adults who were born after 1995 and are part of the demographic group named Generation Z (Gen Z). In 2019, there are 31.5 million Gen Z members who are adult age. This will increase to 44.5 million adults in this demographic group by 2032 as all the younger members become adults.
Right now, there are around 14 million adults in the Gen Z category who are using credit for the first time.
Not Too Young To Buy A Home
Transunion reports that most Gen Z members are getting credit cards, which is the easiest form of credit available to them. However, they are also applying for mortgage financing in record numbers. The year-over-year increase in home loans among this demographic group is up 112%.
Planning For The Future
In a study conducted by Bank of America, the majority of Gen Z consumers, who are between 18 and 23 years old, are already saving for the down payment needed to buy a home. A huge number of them, 59%, report that they plan to purchase a home during the next five years.
Most dream of owning a home before they are 30 years old. They want to buy modestly-sized and lower-priced homes. They have a high interest in homes that are energy-efficient, homes that use smart technology, and those with renewable energy systems.
Smart Homes And Smart Financial Planning
Many of this generation are still living with their parents to save money for a home purchase, which they would otherwise have to pay in rent. Having lived through the Great Recession in 2008, they are, in general, more pragmatic than previous generations. They take home ownership very seriously.
Manifestation Of The American Dream
Over 71%, of those desiring to buy a home, are already designing it in great detail by selecting things they find on the Internet, which appeal to them. They use social media systems like Pinterest and others to get interesting decorative ideas. They share their home decor ideas with friends.
Conclusion
REALTORS® who work with this new group of home buyers will likely find them more motivated to buy a home than previous generations. They are usually more dedicated with their serious financial planning efforts in how to go about achieving their dreams.
The Generation Z consumers know what they want. They are willing to make sacrifices to get it. The majority want a home and are making plans about how to pay for it.
If you are in the market for a new home or interested in refinancing your current property, be sure to contact your trusted home mortgage professional to discuss your financing options.
Last week’s economic news included readings on home price trends, pending home sales and weekly readings on average mortgage rates and first-time jobless claims. The University of Michigan also released consumer sentiment report.
