Gen Z Got the Memo: Owning a Home Is Worth It
April 11 2019 - 10:00AM
Business Wire
More Than Half of Gen Z Already Saving for a
Home, Motivated by Current Homeowners of All Ages Who Say the
Satisfaction of Owning Outweighs the Challenges
The youngest generation of homebuyers is not dragging their
feet. According to Bank of America’s Homebuyer Insights Report, 59
percent of prospective homebuyers between the ages of 18 and 23
want to buy within the next five years, meaning they would own a
home before the age of 30. While certainly aspirational, this isn’t
just a pipe dream for Gen Z; more than half have already started
saving, showing their commitment to this goal, and 71 percent say
they know what they want in a home.
“It’s exciting to see Gen Z wanting to own a home for reasons
like building their personal wealth over time,” said D. Steve
Boland, head of Consumer Lending at Bank of America. “Despite their
young age, this group is pragmatic and actively planning for their
future. They recognize buying a home isn’t easy and have a clear
vision not only about where they plan to get help but also how they
are willing to help themselves in order to make it happen.”
While young prospective buyers identify saving for a down
payment and closing costs (66 percent) as the top barrier to
buying, they see it as less of a challenge than other generations
do (vs. 69 percent of millennials, 72 percent of Gen Xers, and 74
percent of baby boomers). Covering the monthly costs of owning (58
percent) and – more so than any other generation – lacking
knowledge about where to start (52 percent) are also considered
barriers to homeownership by Gen Z.
Gen Z chasing the dream and willing to sacrifice
Knowing that there are barriers isn’t deterring Gen Z, though.
Prospective Gen Z homebuyers are prioritizing saving over frivolous
spending. When asked what they’d do with $5,000, they said they
would rather:
- Save it for a down payment than plan
their dream wedding (80 percent vs. 20 percent).
- Save it for a down payment than go on a
shopping spree (76 percent vs. 24 percent).
- Save it for a down payment than take a
vacation (71 percent vs. 29 percent).
Nearly two-thirds of prospective Gen Z homebuyers think they
will receive some financial help to buy, most likely from parents
(21 percent vs. 14 percent of millennials), down payment assistance
programs (17 percent vs. 19 percent of millennials) or other family
members (15 percent vs. 11 percent of millennials). However, this
help is not necessarily a gift as more than half of Gen Zers think
they will need to pay their parents back, compared to 40 percent of
millennials.
Gen Z aren’t just planning to ask for help; they are also taking
action to achieve their goal. Nearly all (94 percent) are willing
to make intentional sacrifices to buy:
- Nearly half are willing to get a second
job (vs. 38 percent of millennials).
- Thirty-four percent are willing to
attend a university that will leave them with less student loan
debt (vs. 15 percent of millennials).
- Thirty-two percent are willing to move
in with parents or in-laws (vs. 23 percent of millennials).
A word from the wise: there’s light at the end of the
tunnel
Gen Z’s dreams of homeownership make sense given that most
current homeowners (93 percent) agree that owning a home is worth
the challenges.
Further proving that homeownership belongs on Gen Z’s radar is
current homeowners’ contentment with many aspects of their
lives:
- Eighty-four percent are satisfied with
life overall, compared to 70 percent of prospective buyers.
- Eighty-three percent are satisfied with
where they currently live, compared to 65 percent of prospective
buyers.
- Seventy percent are satisfied with
their financial well-being, compared to less than half of
prospective buyers.
“Our goal is to help our clients reach their financial goals,
and building their personal wealth over the long term through
responsible, comfortably affordable homeownership is one of the
biggest financial goals they have,” added Boland.
To learn more about the Bank of America Homebuyer Insights
Report, click here.
Bank of America Consumer LendingBank of America’s Consumer
Lending unit includes First Mortgage, Home Equity, Consumer Vehicle
Lending and residential real estate lending for our Global Wealth
and Investment Management business units. Each business is focused
on delivering a distinctive and consistent client experience
through competitive product offerings, quality loan production,
choice of multiple connection and delivery methods, and operational
excellence based on a client’s unique attributes and relationship
with us.
About the Bank of America Homebuyer Insights ReportConcentrix
Analytics conducted an online survey on behalf of Bank of America
between January 30 and February 21, 2019. Concentrix surveyed a
national sample of 1,919 adults ages 18+ who currently own a home
or plan to in the future. In addition, the national sample was
supplemented by another 782 respondents to reach the following
groups: Generation Z, single females, single males, renters and
homeowners that have paid off their mortgage. The margin of error
for the national quota is +/- 2.2 percent, and the margin of error
for the oversampled markets is approximately +/- 3.5 percent, with
each reported at a 95 percent confidence level.
Bank of AmericaBank of America is one of the world’s leading
financial institutions, serving individual consumers, small and
middle-market businesses and large corporations with a full range
of banking, investing, asset management and other financial and
risk management products and services. The company provides
unmatched convenience in the United States, serving approximately
66 million consumer and small business clients with approximately
4,300 retail financial centers, including approximately 1,800
lending centers, 2,200 Merrill Edge investment centers and 1,500
business centers; approximately 16,300 ATMs; and award-winning
digital banking with more than 36 million active users, including
over 26 million mobile users. Bank of America is a global leader in
wealth management, corporate and investment banking and trading
across a broad range of asset classes, serving corporations,
governments, institutions and individuals around the world. Bank of
America offers industry-leading support to approximately 3 million
small business owners through a suite of innovative, easy-to-use
online products and services. The company serves clients through
operations across the United States, its territories and more than
35 countries. Bank of America Corporation stock (NYSE: BAC) is
listed on the New York Stock Exchange.
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version on businesswire.com: https://www.businesswire.com/news/home/20190411005234/en/
Reporters May Contact:Terry Francisco, Bank of America,
213.345.9024terry.h.francisco@bankofamerica.comKris Yamamoto, Bank
of America, 805.526.1910kris.yamamoto@bankofamerica.com
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