Home prices are going up, inventory is drying up, and wages are not increasing nearly as quick as real estate prices. Simply put, pursuing the American dream has become increasingly difficult, especially for young adults struggling to navigate student loan debt, and stay on their feet.
According to a report by PropertyShark, millennials’ goal to own a home is not as far-fetched as it seems.
PropertyShark surveyed 2,134 U.S. renters, owners and people living with family to determine savings, home ownership, amenity, and community preferences, as well as demographic data such as employment and marital status.
According to the company, although student debt is the number one obstacle for Gen Z and Millennial respondents, an amazing 83% of Gen Z has plans to purchase a home within the next five years. This indicates that millennials are going to cause a stir in the market within the next few years.
Millennials have also been so locked into the rental market that they can’t even think about buying a house. A report conducted by RentCafé found that Millennials are paying nearly 45% of their total income towards rent and setting aside about $92,000 towards rent before they turn 30. It’s recommended that you pay no more than 30% of your income towards rent.
PropertyShark discovered that the same number of Millennial and Gen Z respondents expect to pay more than $50,000 for a home down payment, which is about a third of both generations. However, when compared to Gen Z, Millennials expect they’ll need to put $41,000 down on a home payment, which is about 10% more than Gen Z.
So, what exactly is driving Gen Z homeownership optimism? Technology and amenities.
Gen Z is dreaming big; they want large homes and are less likely to compromise this desire when purchasing a home. While Millennials find extreme importance in location, millennials would sacrifice location and an easy commute for space and amenities, according to the report.
PropertyShark determined that entertainment options rank significantly higher than living close convenient outdoor spaces, and “the digital fluency” indicates that Gen Z prizes smart appliances and smart homes over their generational counterparts. They want more up-to-date, luxury items in their homes.
In the next decade, the housing market can expect millions of millennials lining up to buy a home and carve out their slice of the American Dream.