NASHVILLE, Tenn. (WKRN) – As more Millennials and Gen Zers age into their peak homebuying years, a new analysis by Zillow shows more than half of these young adults plan to use money saved during the pandemic toward buying a home.
This shows homeownership appears to be a priority among members of, what some consider, the rent-forever generation.
“The millennials have been our largest home buyer for a while; it’s the Gen Z I’m starting to really see,” Maria Holland, Realtor, RE/MAX Homes and Estates, Lipman Group said. “They’re the ones listening to the podcast on financials, they are really saving early, they’re trying to go to school without debt. They, from the beginning, evidently have more of that mindset, so they’re coming out of that school into that mindset and really stepping into it and I love it.
The primary driver is the nation’s record-low mortgage rates.
“Millennials are one of the largest generations that we’ve seen and a lot of them are aging into those prime home-buying years so that’s adding a lot of demand onto the market,” Nicole Bachaud said, a Zillow Economic Data Analyst. “Homeownership is on the forefront of a lot of people’s minds right now.”
Zillow recently found that about three in five, or 59% of Millennials and Gen Zers plan to use money saved during the pandemic toward a down payment on a home.
Around a quarter say social media influencers and celebrities impacted their housing decisions, with a majority of young adults discuss their housing decisions with their parents.
Of those who saved for a down payment on a home, some said they saved the most money by avoiding shopping, vacations, and child care during the pandemic.
However, it is worth noting here, lots of people didn’t save anything during the pandemic, especially those who lost their jobs. In fact, Zillow found that many young adults, especially women and BIPOC (Black, indigenous, people of color) were disproportionately impacted by the pandemic, with nearly three million moving back home with their parents in 2020.
As for those who were able to save up for a down payment, the home didn’t come easy.
“We have fewer homes period,” Holland said. “Our inventory right now is 1.5 months; what I’m seeing though is a disadvantage for these younger buyers. They don’t the ability to pay over appraisal like some of the investors and the California buyers do. They don’t have that, so they’re losing out on these bids.”
The current market conditions we’re seeing now with low inventory and high demand aren’t always a friendly place for a first-time homebuyer.
“When you see someone young that has saved money and are excited to buy, they make a great offer on a property, they’ve got everything in place, their financing is in place, they’ve saved all this money, they’re ready to go for it – and offer after offer they lose because there are ten to eleven offers and they lose because someone went $30,000 over list,” Holland said.
That amount isn’t easy to save, but Holland says hang tight, the right home will come.
Keep in mind, this is your first home, it may not be your dream home but that’s okay. “I would encourage whoever is looking to keep looking there is one that eventually will happen,” Holland said.