A recent Zillow survey of Millenials and Gen Zs found some interesting findings of their housing market sentiment.
As economists reported, many spent their lockdown saving money and paying off loans. From April-June last year, Americans saved an incredible 25% of their disposable income, compared to 7.3% in 2019. Moreover, according to Zillow’s research, young adults said they are likely to put these savings toward a down payment post-pandemic.
Millennials are now the largest generation in the U.S., so their decisions and preferences significantly affect the market. With limited housing inventory and rapidly appreciating homes, the market is hot. In addition, young adults are preparing to enter the housing market while historically low interest rates are available, along with the many mortgage options that offer low down payments.
Forever Rent Generation
Millennials and Gen Zs might be about to shake off their reputation as the “forever rent generation.” With high rents and living costs, and the burden of student debt, many young adults suggested they would find it difficult to afford a house. But that could be about to change.
The pandemic was a challenging time for everyone. However, younger workers were the most affected by job losses. Indeed, over 3 million young adults moved home during the coronavirus, according to Zillow data. But for those that held on to work, the pandemic proved to be an opportunity to save money.
With no options for nights out, restaurants, or holidays, in addition to reduced work and travel expenses, many people found themselves with excess money. Indeed, per the report, 83% of Millennials and Gen Zs found that they saved money in specific categories during a lockdown.
Related: Why Buying a Home Is Harder for Millennials
Where Will Young Adults Go?
One of the most interesting facts for the real estate business is that 59% of those surveyed suggested using their savings to put a downpayment on a home. To break it down, that is a total of 130 million people between the two generations.
What Influences Millennial and Gen Z Home Buying?
Other findings from the survey looked at what influences Millennials and Gen Zs to make decisions about housing. Surprisingly, 27% of young adults said influencers and celebrities inspired them to make housing decisions.
When asked about preferred locations, 44% of young adults suggested they would like a remote or somewhat remote location. Of the remaining survey, 36% said they’d prefer to live in a city, while 20% had no preference. While COVID probably sped up this trend, the last few years have seen a rise in young adults leaving metro areas for the suburbs and more remote areas.
As for what mainly influences how young adults make decisions about housing, 71% said they discussed homebuying findings with the help of their parents. In addition, 61% of young adults said that their friends’ opinion is essential in helping them choose a property.
Another finding was that around 32% of Gen-Zers and millennials reported that some of their friends had purchased a house. Research suggests that about 6.4 million households will be formed by 2025, resulting in young adults keeping the housing market on a very upward trajectory for years to come.
Related: Top First-Time Homebuyer Mistakes to Avoid
Conclusion
While Millennials and Gen Zs have previously been named the “rent forever generation,” the pandemic lockdown may have altered how they feel about home buying. While many lost their jobs, forcing them to move in with their parents, others were luckier and managed to ride out the pandemic unscathed.
Like many others, young adults managed to save money during the stay-at-home orders. This Zillow survey measures what they plan to do with these savings, with 6 in 10 suggesting they will put them toward a housing deposit.
As the U.S. property market boom continues, these findings could suggest that many young adults plan to enter the market as first-time buyers over the next few years. With the market starved of inventory already, this underlines the need for a building boom to meet demand.
The Millennials are the country’s largest demographic, and they are moving into their peak homebuying years. So, if they are no longer to be generation rent, they will be joining an already very active market.
Marimark Realty
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