Financial illiteracy among younger generations is often cited as the most forceful catalyst influencing America’s surging consumer debt. The broad stroke is hard to argue against and Generation Z knows it.
According to a massive new survey conducted by mortgage lender Freddie Mac, because Gen Zers grew up in the belly of the great recession of 2008, they’ve made a point to ensure that all their fiscal p’s and q’s are in order. Eighty-percent of this demographic are working towards owning their own home, and the same amount intends to do so by the time they reach 30.
The poll was enacted by responses from 1,531 American teenagers and young adults between the ages of 14 and 23-with the youngest and oldest ends of this range uniformly expressing interest in homeownership. To be clear, these aspirations weren’t spirited by some misplaced idealism. The Freddie Mac poll revealed that the vast majority of Gen Zers fully comprehend the difficulties and struggles that come with owning a home, and are ready to confront them head-on
“Our survey of respondents (ages 14-23) finds that Gen Z views homeownership as an important goal,” the authors write. “Gen Z does, however, see the following as obstacles to homeownership: home prices (92%), saving for a down payment (82%) and unstable job or job change (68%). For those who plan to pay for college, student debt is considered a major obstacle (54%).”
The current median age for homeowners is 33 though one in 10 Millennials expect that they will be renters for the rest of their lives. Conversely, 96% of Gen Zers believe that owning a home is the single most significant maker of success and an additional 88% of this same group believes that it is a symbol of independence and autonomy. This contrast of values infects the fundamental personality of young adulthood in the modern age.
Thirty-three percent of Gen Zers expect to pursue a bachelor’s degree, and 30% intend to pursue a master’s degree or higher, compared to the 27% and 12% of Millennials that reported the same, respectively. The two generations are linked by an acknowledged dearth of acumen, however. Sixty-five percent of Gen Z respondents admitted that they are not super confident in their knowledge regarding the mortgage process.
“To learn more, 71% of Gen Z would consult with a parent, 58% with a real estate agent, 54% with the Internet, 45% with other family and/or friends, and 41% with a bank or mortgage lender,” Freddie Mac continues.
Some of the Millennials surveyed that didn’t expect to own a house any time soon occasioned reasons other than financial security. Thirty percent felt that renting made them feel like they were apart of a community. For the small group of Gen Zers that weren’t planning on owning a home, flexibility was a persuasive motivator (63%). An additional 68% felt that renting was considerably less stressful than owning a home and the remaining were allured by the idea of living in an urban metropolis.
“The dream of homeownership is alive and well within Generation Z, the demographic cohort following Millennials” Freddie Mac concludes. “Gen Z respondents reported that they have received financial education at home and are at least somewhat confident in their future well-being.”