It’s time to focus on Generation Z in the housing market.
That was the message from David Mele, president of Homes.com, at a real estate conference in Austin on Thursday.
“We want to look at Generation Z because it’s next,” Mele said. "It’s the group coming right now to begin the home-buying process.”
Millennials still make up more than a third of the U.S. home buying market. But Gen Z, defined by Mele as those under the age of 24, will be the largest group of homebuyers by 2026 with about 82 million consumers, he said.
The Gen Z demographic is larger than the millennial age group, more racially and ethnically diverse, and has come of age in a different time period, Mele said at the National Association of Real Estate Editors conference.
“While millennials entered the home-buying market right after the largest financial crisis since the Great Depression, Gen Z is entering during a time of economic prosperity," Mele said. “Full employment. A healthier economy.”
According to a Homes.com survey presented by Mele, about 87 percent of Gen Z expects to own a home by age 35. That’s about 20 points higher than the overall home ownership rate in the U.S., which is about 64 percent.
Most of Generation Z believes that they need to save 11 percent or more for a down payment on their first home, Mele said, and more than a quarter of the under-24 survey respondents think they need to save at least 20 percent, he said.
“These are really big numbers,” he said. “It’s motivating saving on behalf of Generation Z, but it’s actually a little too high.”
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