Key Highlights
- Fannie Mae survey in 2019 indicated 88% of Gen-Zers and Millennials confident they’ll achieve homeownership someday
- 80% of younger potential buyers see homeownership as best way to make it on their own
- Less than 50% of younger potential buyers see home as financial asset
In the most recent survey of younger potential homebuyers completed pre-pandemic by Fannie Mae in 2019, 88% of Gen-Zers and Millennials ages 18-34 years said they were sure they would eventually achieve homeownership.
Instead of being driven by financial reasons to become homeowners as past generations have been, this cohort is motivated to achieve homeownership as the best way to achieve their independence or to “make it” on their own. And, less than 50% of this cohort indicates they want to use their home as a financial asset.
In a study completed this year during the pandemic, the Joint Center for Housing Studies at Harvard University anticipates a +7% increase in homebuyers who are single and a +6% increase in homebuyers who are married without children between 2018 and 2023. Such anticipation signals a need for smaller homes. (The problem is that there is a supply shortage of smaller homes.) Additionally, the Joint Center indicates that younger potential homebuyers would be open to considering buying a fixer-upper. (The problem is that 31% of the younger potential homebuyers think they would have trouble finding a home, any type of home, they could afford.)
One important reason younger potential homebuyers think they would have trouble finding an affordable home is the high amount of debt they carry due in large part to rising costs of higher education. According to Northwestern Mutual’s 2019 Planning and Progress Study, adult aged 18+ years report having an average of $29,800 of debt.
On top of that debt, 77% of younger potential homebuyers are uninformed about/unaware of low, affordable down payment options. (As you know, such affordable down payment options can be as low as 3%.) Additionally, Fannie Mae’s survey also indicated that only 39% of younger potential homebuyers were aware of manufactured homes as affordable options/pathways to homeownership.
The good news about this lack of or limited awareness of bottom line homeownership specifics is that you as real estate professionals can help educate and inform this younger generation abut need-to-know issues involved with home buying and homeownership. Plus, you can refer your clients to lenders and non-profit housing counseling agencies authorized under the Department of Housing and Urban Development to help educate and inform this younger generation as well.
If you choose to share you knowledge as an educational real estate professional with your younger clients, chances are you may have one or more home-owning clients for life.
Thanks to HousingWire, Fannie Mae and the Joint Center for Housing Studies.
Also read: What Are Owners Fixing in Their Houses?, Renters Richer, Older and Have Larger Households, Rampant Uequity in Senior Housing Worsening
