Gen Z: homeowners by age 30? Gen Z wants to buy a home in 5 years, but most early adults still receive financial support from parents.
Nearly 60 percent of Gen Z wants to buy a home within the next five years, meaning they would become homeowners by the age of 30, according to research by Bank of America.
Gen Z Saving to Become Homeowners by Age 30
More than half of prospective Gen Z homebuyers have already started saving, but they know there are a few barriers to buying, like saving enough for a downpayment, covering the monthly costs of owning and maintaining the property and a lack of knowledge about how to start the process.
But it isn’t as though Gen Z is waiting for a homeownership handout. More than 90 percent of Gen Z is willing to make a sacrifice to buy a home. Getting a second job tops the list of things they’re willing to do, but they’d also attend a more affordable university to lessen their student loan debt burden or move in with parents or in-laws first in order to save money. When asked what they’d do with $5,000, roughly 75 percent of Gen Z said they’d save it for a down payment on a home purchase rather than use it to plan their dream wedding, take a vacation, or go on a shopping spree.
And, here’s something that will surprise almost no one: Gen Z is also the generational cohort most likely to have financial help when buying a home.
Financial Support Will Help Gen Z Become Homeowners
A recent study by Merrill Lynch found 70 percent of early adults received financial support from their parents in the last year, and almost 60 percent of those who received help from their parents couldn’t have afforded their lifestyles without it.
In the homebuyer report by Bank of America, 60 percent of Gen Z said they will receive financial help to buy a home. More than 20 percent of them will receive help from their parents. Roughly fifteen percent of Gen Z will use down payment assistance programs or receive financial help from family members other than their parents.
Gen Z is Trading Home Buying Assistance Now for Future Caregiving
Of course, there are often strings attached to this sort of financial support. for adult children. Another report by Merrill Lynch found that parents spend twice as much supporting their adult children than they do contributing to their own retirement each year.
Most early adults say they would be willing to pay financial support back by supporting their parents in the future. It might sound like lip service, except children are already stepping in as caregivers for aging parents and relatives. The average U.S. caregiver spends nearly 20 hours per week—the equivalent of another part-time job—providing unpaid care to elderly relatives. It’s incredibly stressful to juggle caregiving activities with work and other family responsibilities, so much so that flexible work arrangements are becoming the new norm in a tight job market.
Why is Gen Z Racing to Become Homeowners?
Millennials, Gen X and Baby Boomers said building wealth over time was the main reason they want to own a home, but for Gen Z, starting a family was more important. Building wealth over time was their second reason for seeking homeownership and across generations, making the family proud was the least likely reason to become a homeowner.
Millennials (the eldest of whom are now in their late 30s) are just now becoming homeowners, largely because of student loan debt but also because they delayed life events like marriage and starting a family. It’ll be interesting to see if Gen Z is able to become homeowners and start families in 5 years, or if they will encounter other obstacles (financial, emotional or social) that hinder homeownership and family planning.