Gen Z Homebuyers Choosing Relocation Over Home Budget Increase

Despite the Odds

Some sources report Gen Z’s lack of motivation to purchase a home these days. However, this is far from the truth; despite some “financial nihilism” present in the generation as a result of the unaffordable prices, many 20-somethings are still managing to make their first real estate purchases.

Lower cost starter homes have disappeared in many markets, while most new construction is aimed toward the higher end. Despite this, The National Association of Realtors found that 4% of homebuyers were Gen Z (18-26) last year. This was a 1% increase from the previous year. Interestingly, 35% of buyers in their 20s were single women, the highest share among all generations.

Where Gen Z’s Preferences Lie

In a NewHomeSource survey, 63% of Gen Zers said they would relocate to a new city or state. On the other hand, only 19% would rather raise their housing budget in order to make a home purchase.

Millennials are willing to pay up to $500 more per month to lock down a home, while most Gen Zers cap at $300 each month. The majority would prefer to spend only $150 more on housing. This highlights a shift in the homeownership framework, where new homebuyers are setting boundaries and opening up their search across city and state lines to find a budget- and lifestyle-friendly home. In contrast, other generations have stretched themselves financially to purchase as soon as possible.

Over half of the survey participants cited the suburbs with walkable, urban-style amenities as their ideal location. Young buyers also seem to be addressing the issue of affordability by adjusting where they buy as apposed to making financial considerations a main reason to consider a move. They are less willing to compromise on the home itself; 39% of those surveyed said they were willing to wait longer if it meant finding the perfect fit.

Milestones on Backburner

In alignment with these findings, a Coldwell Banker survey from last November showed that 84% of Gen Zers are postponing major life decisions such as marriage, kids and career changes until they can purchase a home. 63% of respondents report they would consider co-buying with family or friends, which is far more than any other generation. In fact, about 20% are already living with parents, specifically to save toward a purchase. Although the average first-time homebuyer age reached 40, many young people are still working extra hard to reach their goal of purchasing a home.

Information courtesy of RealEstateNews.com and NPR.org.

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