Over 40% of Gen Z plans to buy a home in the next three years

Over 40% of the Gen Z cohort plans to purchase a home in the next three years, but more than one-in-10 say even though they want to buy, they will never afford it.

This includes one-third that stated they will buy in the next one-to-three years while an additional 8% of the more than 1,000 22-to-27 year olds that Insurify surveyed said they were looking to buy a house in the next year.

Only a small percentage of the respondents had negative views on homeownership, 5% claiming they don't want to own and can't afford it; 1% stating they can afford it but don't want to own; and another 1% declaring that "they were against the concept of homeownership."

These results are in line with prior surveys that note the immense desire of Gen Z to be able to own their own home, but also that many feel that being able to get a mortgage is out of reach, a study released in 2023 by TransUnion reported.

"We're going to see a wave of that population hit the market in the next few years, once inventory levels out a little bit," said Matt Dunbar, senior vice president of the Southeast region at Churchill Mortgage. "I think you'll see it pick up but right now their incomes really got to start outpacing where prices are."

Besides the 41% that want to buy within the next three years, 22% are looking to purchase in a four-to-six-year time frame. Another 16% said their timeline is seven years or longer, with half of that group looking to act by nine years.

Current mortgage interest rates are elevated compared with the pandemic years, but on a historic basis are not high, Dunbar said. "They're not unmanageable, but when you couple that relatively high housing price and lower inventory, it becomes a big challenge for that group."

Just under one-third of Gen Z respondents to the Insurify survey, 31%, said they wanted to own a home to start or support a family, while another 22% wanted to build generational wealth. The No. 3 cited reason was freedom to renovate at 21%.

Building equity was cited by 9% while stabilizing their housing costs was fifth at 8%.

Among those surveyed, 40% of the men said they were planning to purchase a home on their own, versus just 28% of women.

A survey completed last September from Maxwell and cited by Insurify in a blog post about the Gen Z study found single women are the fastest growing group of home purchasers. Since 2021, women mortgage applicants grew by 10% but males just 7%. Single women made up 22% of the home purchasers at the time of the Maxwell survey. By age, 18-to-24 year-olds made up 20% of single female mortgage applicants, and 25-to-34 year-olds another 35%.

National Association of Realtors data pointed out that since 1981, the share of single women homeowners has been consistently larger than that of single males. Back then it was 11% to 10%; in 2021, the gap was 10 percentage points, 19% to 9%.

But Insurify pointed to other data in the Maxwell study that noted 60% of single women mortgage applicants earn less than $100,000 per year, compared to 42% of single men applicants. It also cited Bureau of Labor Statistics reports that show women earn 84 cents for every dollar a man gets in income.