Hommati Logo

Download the App

How Generation Z Will Change the Housing Market (Forever)

Go back
How Generation Z Will Change the Housing Market (Forever)

From their stark values to high-tech housing preference, these are the housing demands of Generation

The good news is that Gen Z has big aspirations when it comes to housing.

  • They’re twice as likely than previous generations to have bought or want to buy a home before age 25.
  • 97% want to own a home in the future.
  • 87% want to buy before the age of 35.

The bad news is that Generation Z will carry a heavy student loan debt burden. Today, newly minted college graduates have an average of $37,000 in student loan debt. But their salaries are not keeping pace with rising costs of housing.

Smart real estate agents have already begun preparing for a new industry dominated by Gen Z consumers. Are you being smart?

Gen Z Is The First Fully Digital Generation

Gen Z’s use of technology in their daily life has shaped every aspect of their existence. Learning, communicating, shopping, traveling, socializing, and entertainment are inextricably linked to technology.  

  • Babies watching iPads strapped to the headrest as they recline in their car seats.
  • Toddlers intuitively swiping simple letter and number games on their parent's smartphones.
  • School kids writing and submitting essays with Google Docs.
  • Birthday party invitations created in apps and delivered via email.
  • Girls Scouts selling cookies online.
  • Teachers communicating electronically with students in the evenings and on weekends about last-minute changes to assignments.
  • Teenagers using apps to drive to new places or avoid traffic on their way to school.  
  • Girls buying 3 possible prom dresses online only to return the ones they don’t like.
  • Sneakers being customized online and delivered in a few weeks.
  • College applications and acceptances are done electronically.  
  • Friends exchanging money electronically.  

Remember, Apple launched the first iPhone in 2007 when the oldest Gen Z-ers were 10 years old. Younger Gen Z members don’t remember when there wasn’t an app for just about everything they needed or wanted.

Who Is Gen Z?

The exact years that define the beginning and end of Gen Z differs among research organizations. The well-regarded Pew Research Center considers Millennials to have birth years between 1981 and 1996. Anyone born in 1997 and later is considered part of a new generation. 

There isn’t a scientific formula to determine cut-off points. The data cited in this article vary in exact years that bookend Gen Z, but the implications of the research point you in the same general direction.  

It’s important to keep in mind that the oldest members of Gen Z aren't even 25 years old yet!  The data gathered is from subjects that are still kids or very young adults. This is a consistently aspirational time of life for all generations!  Researchers are eagerly collecting data to understand and prepare for this new generation but at this early stage, predictions are closer to speculation.

Generation Z Characteristics

The number of Gen Z members in the U.S. is estimated at 61 million. They will account for 40% of consumers by 2020.  Currently valued at $44 million, their spending power will continue to grow. What else do we know about them?

  • They're the most racially and ethnically diverse generation in U.S. history.
  • They value equality.
  • They are risk-averse and practical.
  • The majority consider themselves savers over spenders.
  • They live a 24/7 life.
  • 85% will watch one online video to learn a new skill in any given week.
  • They are financially savvy. 52% say they’ll use personal savings for retirement. 28% say they’ll continue working. Few plan to rely on employer pensions or Social Security. 
  • They're an on-demand consumer.
  • They have an 8-second attention span.
  • They like the customization and personalization of products and experiences. 
  • They're experts at using the web to get to the truth of an idea or product.
  • They want to know where and how products they consume are made.
  • Drinking, smoking, and drug use are the lowest in decades among this generation. 
  • They rely more on friends and family advice and Google searches than their doctor for health and nutrition information.
  • When traveling, 85% prefer staying in hotels over 52% with friends and family.
  • They are connected over ten hours a day.
  • Gen Z teenagers received over 3,000 text messages a month. 
  • 70% watch 2 hours of YouTube per day. 

Understanding the characteristics that define Gen Z is a work in progress. They’re entering the workforce during a strong labor market or are seeing their parents enjoy a strong labor market.

But they may have also seen their families and communities struggle through the Great Recession. These experiences are shaping their values and beliefs.

Values and Beliefs

Successful real estate agents will be able to find housing that facilitates the values and beliefs of their Gen Z customers.

One of the most interesting findings from a consulting firm’s survey is that Gen Z highly values the act of creating. Twenty-five percent post original videos on a weekly basis. Ninety-four percent say being true to themselves is important. Other observed values and beliefs are:

  • They prioritize human rights over all other issues.
  • Entrepreneurial drive is about self-reliance and stability rather than soaring valuations and Silicon Valley cachet.
  • They value authenticity. They’ve seen a lot of inauthentic stuff on the screen and are discerning.
  • Being an adult means being financially independent of parents, having a full-time job, living separately from parents, and buying a home.

Another interesting finding about Gen Z is that they equate financial success with being debt-free. It will be interesting to see how many of them are able to adhere to this value while having student loan debt and the strong desire to own a home.

How Are They Different from Millennials?

Even though Millennials and Gen Z are often lumped together as the latest generation, there are some important differences that have been observed. What are these differences?  Here is a broad selection of differences observed thus far: 

  • Gen Z has interacted with digital technology from birth. They are savvy and selective with their time and money. 
  • Gen Z relies more on friend’s opinions than online reviews because they know testimonials and reviews can be faked and monetized.
  • Gen Z is more frugal than Millennials.
  • Gen Z is more focused on long-term stability in careers and finances.
  • Gen Z is more likely to have learned about money and finances from their parents.
  • 25% of Gen Z thinks debt should be avoided at all costs; whereas the Millennial’s mentality is that college and credit card debt are a fact of life.
  • Gen Z is 55% more likely to want to start a business than their Millennial counterparts. 
  • Gen Z’s favorite website is YouTube versus Millennials favorite, Amazon.
  • Gen Z prefers ads that include celebrities.
  • 60% of Gen Z want to change the world versus only 39% of Millennials.

Gen Z has seen the social media mistakes of Millennials. They're more aware of the implications of debt and overspending as they see Millennials struggling to purchase homes.

Implications for Housing Preferences of Generation Z

Gen Z believes in the American Dream of homeownership. Nearly all of them, 97%, hope to own a home in the future. About 100,000 members of Gen Z have already purchased a home. Almost half of these paid less than $10,000 for a down payment. Most of these had saved for a down payment for less than five years. 

Homeownership isn’t just about the American Dream for Gen Z. Having grown up watching HGTV and YouTube DIY videos, Gen Z wants to customize their space. Some research shows over 60% of Gen Z said this was a top reason for wanting to buy a home.


This generation is fully digital and is always connected. They expect electronic processes and smart infrastructure in a home or a rental community. What are the implications for real estate professionals? 

  • A website that loads at lightning speed. If your website is slow to load, Gen Z will move on to websites that load quickly.
  • Totally digital application process. All rental forms, payments and maintenance requests must be electronic.
  • Communication with prospects should be through social media or text. Gen Z is not a fan of phone calls.
  • Apartment or home has the highest-speed WiFi available because Gen Z expects a “smart” home – appliances, thermostat, security, etc. are all connected wirelessly.

You don't have to be a rocket scientist to understand that real estate professionals who don't fully embrace electronic processes and communication will be invisible to Gen Z. 


Considering the average median home price in the most affordable U.S. metros areas will be $191,381 by 2031, Gen Z has their work cut out for them. To make a 20% down payment, today’s 18-year-old Gen Z who wants to purchase a home by the time they are 30 years old will need to put away about  $300 per month.  

Gen Z’s biggest obstacle to saving for a down payment will be student loan debt. The average loan balance of Gen Z’s graduating from college now is about $37,000. These graduates are facing a healthy labor market but also one where salaries are not rising as quickly as the costs of living. Salaries range from about $30,000 to $60,000 for Gen Z’s graduating with the most common college degrees.

On the rental side, about 44 million Gen Z’ s will be hunting for their own apartment over the next few years. Gen Z renters seek affordability above all else in the rental market. That being said, they’re accustomed to robust amenities. The homes they grew up in and the norms of college student housing have set higher expectations for amenities. More below on amenities.


The available research on Gen Z’s location preferences presents a muddy picture. Do they like urban? Rural? Suburban?  

The preliminary data shows that like many newly minted college graduates, Gen Z prefers to rent in large urban centers. But when it comes to buying a home, research shows that 60 % prefer the suburbs. One clear data point is that Gen Z isn't looking to live in rural America. 

They want to live in communities that look like them and this means racially and ethnically diverse neighborhoods. 


After price, space is the next priority for Gen Z’s when it comes to choosing where to live. However, this space can come in the form of communal space. Generation Z prefers to hang out in communal space rather than be alone in their apartment.  

But when it comes to their personal space, they expect the ability to customize everything.

Remember, they grew up watching HGTV and YouTube DIY videos. While this may seem like a challenge the rental community, it also means they’re open to buying fixer-uppers. 


Gen Z prioritizes communal amenities. While swimming pools and fitness facilities have been important to their predecessors, Gen Z wants:

  • Co-working spaces.
  • Creative/maker spaces for hobbies and crafts.
  • Package collection while they’re traveling or at work.
  • Pet-friendly communities – maybe even a dog walking service.
  • Having or being near shared entertainment amenities.
  • Discounts and partnerships with local businesses.

Customization is a significant expectation for Gen Z.  Real estate professionals will need to figure out how to meet this need. It may translate into customizing physical space or it may mean customizing leasing agreements.

What Now?

If you’re trying to reach members of Generation Z who are in the housing market, focus your marketing on social media rather than emails or online ads.

If you’re trying to create the right customer experience for Gen Z, you should know that research shows  81% plan to use  a real estate professional in the home buying process.

Other research shows that 90% of them will only use online resources when hunting for housing.  The takeaway here is that the real estate agent will need to figure out how to add value as an online resource.

Generation Z is highly attuned to “being sold” – they can smell a fake testimonial or contrived emotional appeal a mile away. The best way to create buzz is to get your happily housed customers to share their pictures and experiences on social media.