Some are even giving up shopping sprees to save for down payment and closing costs
The majority of the Gen-Z cohort has shown interest in entering the housing market in the near future, and more than half have already started to save for a home.
Of the potential buyers between the ages 18 and 23 who want to buy a home, 59% are planning to purchase in the next five years, while 33% intend to buy within six or more years. Only 8% said they have no plans yet on when to buy, according to the Bank of America’s 2019 Spring Homebuyer Insights Report. Fifty-two percent of the youngest generational group has already begun saving for a home.
The report revealed that starting a family was the top motivator for 59% of potential Gen-Z homebuyers. Meanwhile, 47% began saving for a home to build wealth over time, and 33% wanted to make their family proud.
However, Gen Z views saving for a down payment and closing costs as the top challenge to buying. Monthly housing costs (58%) and a lack of knowledge (52%) followed. If they had $5,000, Gen Z said they would probably save it for a down payment instead of planning for their dream wedding, going on a shopping spree, or even taking a vacation.
Despite these barriers, 93% of homeowners believe owning a home is worth the trouble it took to achieve. Current homeowners (83%) and prospective homebuyers (65%) said they were satisfied with their purchases.
“These young aspiring buyers likely got the memo about the benefits of this milestone from current homeowners, who almost unanimously agree that owning a home is worth the challenges,” wrote Steve Boland, head of consumer lending at Bank of America. “Current homeowners are also more satisfied with where they live, their financial well-being and life overall than those who don’t own.”
