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Gen Zers Are Coming For Baby Boomers’ Houses

Gen Zers Are Coming For Baby Boomers' Houses
Gen Zers Are Coming For Baby Boomers' Houses

Gen Zers are tracking ahead of millennials and Gen X for homeownership rates. But high prices and mortgage rates are making it harder for them to buy homes.

Empty-nest baby boomers own more than 3 in 10 large homes. That’s a lot of houses for young buyers to compete with.

They’re the “snowflake” generation

Gen Zers are a financially savvy generation, which makes them a good fit for home buying. However, they are also facing a housing market that is distorted by record-high mortgage rates and rising prices. Many young adults feel that they can’t afford to buy a house, even in places like Washington D.C., where rent is 1.7 times higher than the national average and houses are 1.9 times more expensive.

Despite this, Gen Zers are tracking ahead of millennials and Gen X when it comes to homeownership. In 2022, 30% of 25-year-olds owned their homes, a slightly higher percentage than 28% of millennials and 27% of Gen Xers. However, the homeownership rate for Gen Zers moved sideways last year because of high mortgage rates and elevated prices.

Homebuyers from all generations are struggling to purchase homes in today’s market. Many millennials and older boomers are delaying traditional life events like marriage and having kids to focus on saving money for a down payment. This trend is affecting the real estate market as it means fewer new buyers are entering the market.

Those who are able to find and purchase a home are expected to stay in their homes for longer than previous generations. This is likely due to the fact that Generation Z has witnessed firsthand the financial struggles of their millennial predecessors. As a result, they are highly conscious of their financial decisions and want to make sure that they are making wise investments. Moreover, they are more likely to look for neighborhoods with amenities that will provide them with the lifestyle they desire. This may include access to public transportation, walkability, and proximity to restaurants and shops.

They’re the most resilient

Gen Zers aren’t all avocado toast and $7 lattes, but they do value financial stability. In fact, this resilient generation spends far less than they earn and saves or invests 40% of their disposable income. Moreover, they have an intimate understanding of how quickly circumstances can turn and don’t assume a social safety net will be there to catch them when they fall.

This sense of resiliency is partly why they’re so skeptical of “popcorn finance,” a strategy that promotes risky investments in exchange for high returns. Rather than taking big risks, Gen Zers prefer to put their money in low-risk investments and pay down debt as they pursue homeownership. In fact, this may explain why they’re willing to settle for smaller homes and more modest neighborhoods than their millennial predecessors.

However, even with their wealth of savings from side hustles, it’s still difficult for most Gen Zers to break into the housing market. According to Redfin, mortgage rates and home prices have kept young people from buying homes at the same rate as previous generations.

Another factor is the silver tsunami of boomers who are selling their homes to downsize or move into assisted living facilities. This trend has caused an increase in housing costs across America. The resulting competition has also kept millennials and Gen Zers from purchasing homes, according to a recent report by First American.

Despite this, the oldest Gen Zers are tracking ahead of their parents’ generation when it comes to homeownership. A few years ago, the Gen Z homeownership rate was 30%, compared to 31% for millennials and 27% for Gen Xers at the same age. However, this gap is closing as the youngest members of Gen Z begin to reach the age where they can buy their own homes.

They’re the most tech-savvy

Unlike previous generations who struggled with technology, Gen Zers are natural digital natives. They’re comfortable using the latest gadgets and apps, which makes them a great fit for the modern workplace. In fact, they prefer to learn how to use new technologies on their own rather than waiting for an IT specialist to show them. They’re also quick learners and adaptable to change.

They’re also a very pragmatic generation that values sincerity and justice. They’re also interested in social change, family and community. This has led to a strong interest in feminism and environmental activism. In terms of their personal lives, Gen Zers are focused on finding joy and connection offline. They’re also concerned about the effects of social media on their mental health. They’re actively trying to limit their screen time and find ways to connect with others in person.

Like millennials, Gen Zers are also interested in buying homes. However, mortgage rates have risen significantly since their 3% lows, which may make it difficult for young adults to afford a home. This could cause them to move closer to work or choose a less expensive city, such as Virginia Beach, Indianapolis, or Kansas City.

Although Gen Zers have the technological skills needed to work in an office, they may not be able to navigate some traditional office equipment such as scanners and photocopiers. This can lead to “tech shame,” where young professionals feel embarrassed when they don’t know how to use a piece of equipment at work. According to HP, young people are ten times more likely to experience this than older workers. Fortunately, many members of Gen Z have found a way to overcome this challenge by turning to their younger colleagues for tech support.

They’re the most independent

Generation Z may be the slacker generation, but they are also the most independent. Unlike millennials, Gen Zers have grown up with an increased awareness of social change and have witnessed watershed events such as the COVID-19 pandemic and Barack Obama’s presidency. Consequently, they’re not afraid to speak up about their opinions. They’re also very self-aware and are highly conscious of their financial decisions. As a result, they’re looking to enter the housing market early—even as renters.

Homebuyers in Gen Z have benefited from historically low mortgage rates. They’re able to afford a house by the time they are 25, according to Redfin. However, rising interest rates might slow Gen Z’s momentum and prevent them from purchasing a home before they turn 30.

The oldest members of Gen Z are now entering the workforce and starting to earn some serious money. The eldest Gen Zers are set to surpass millennials as the world’s largest earning cohort. They’re poised to take over the housing market as a result.

They’re looking to buy homes in mid-sized, comparatively affordable cities such as Oklahoma City, Indianapolis, and Phoenix. They prioritize proximity to work and family and are willing to compromise on space in order to achieve their homeownership goals.

Baby boomers aren’t going to be able to compete with Gen Z for large homes any longer, and they will likely downsize soon. But this “silver tsunami” isn’t expected to happen until the next few years, and it will take at least a decade for baby boomers to fully downsize. This will lock younger generations out of the housing market, according to economists. The silver tsunami will also make it harder for baby boomers to sell their homes, and the older population’s buying power will diminish.

They’re the most social

Generation Z is the most social-media savvy generation, and they are the most connected to their peers. They use social media as a way to stay in touch with their friends and family, but they also leverage it to connect with brands. This generation seeks authentic and relatable content, and they value transparency. They also embrace a more open, democratic dialogue and are more concerned with issues like climate change.

They are more racially diverse than older generations, and they are the most active generation in civic engagement. Their values of inclusivity and empathy set them apart from other groups. They also tend to be skeptical of the traditional news media and prefer to receive their information through niche outlets that they trust. This means that they are more likely to be informed consumers and will be more willing to buy from a brand that supports its values.

Gen Zers are not naive, and they have watched their millennial predecessors struggle with housing prices that are outpacing wage growth. As a result, they are entering the housing market at an earlier age and are seeking to purchase in mid-sized cities that offer affordable pricing. In addition, they are less interested in luxury properties and want to stay close to their friends and family.

Compared to Millennials, Gen Zers are more likely to be homeowners and to have jobs that are compatible with their home-buying habits. Moreover, they are more likely to live with their parents or other relatives, and 17% of them have children. Overall, this generation has higher high school graduation rates and lower dropout rates than their older counterparts, and they are more likely to be college-educated.

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