“The American Dream” is a set of ideals defined by each successive generation. For the age group we know today as “Generation Z” (teenagers aged 13-17), the American Dream once again includes owning a home. Although they also value other aspects of the American Dream, such as graduating from college, getting married, and having children, 82% of Gen Z respondents surveyed by Better Homes and Gardens Real Estate selected homeownership as the most important factor for achieving the American Dream.
Gen Z appears to be more eager to make their dreams of homeownership a reality than their Millennial predecessors, ages 25-31, many of whom say they plan to delay homeownership and in fact, do not plan to buy their first home until they are over the age of 30. Relocation managers and real estate professionals are already beginning to see the trend toward Millennials as renters, rather than homeowners, due to factors such as unemployment, heavy student loan debt, and a preference for marriage and children later in life. Employment rates have also fallen for young adults in this age bracket, and employment status is a key factor when it comes to homeownership.
As already mentioned, student loan debt definitely plays a role in Millennials’ housing choices because such obligations can be a barrier to obtaining a mortgage. Buying a first home often correlates with marriage and children, but as Millennials postpone these life events, they also postpone the purchase of their first homes.
A brighter future for homeownership seems to hover in the near future when it comes to Generation Z. Research shows that 97% of teens surveyed believe they will own a home during their lifetime, and Gen Z expects to be homeowners sooner than Millennials (age 28 versus age 31). Having grown up in a world transformed by technology, Gen Z will do its homework on the home-buying process online but will still use more traditional methods, such as working with a real estate agent, when it comes time to actually purchase their new homes. Gen Z appears to represent a rising generation of eager new homeowners, and Realtors must be ready for them!