Gen Z buyers have officially entered the real estate market! Just as everyone got acquainted with buying & selling with Millennial homeowners, it’s now time to welcome (and learn about) the next generation of housing market participants.
Gen Z, born between 1997 and 2012, is in the early stages of their professional lives. Unlike previous generations, Gen Z approaches home buying with a fresh perspective, largely influenced by growing up in a world driven by technology. They aren’t just looking for a place to live, they’re looking for a place that fits their lifestyle and values. If you’re a seller, now’s the perfect time to get familiar with what this new group of buyers values most.
The housing market has long been a predictor of U.S. economic health and a well-established means of wealth creation. This is understood by Gen Z, with more than half reporting that they are currently saving for their first home (despite facing high interest rates and rising costs.) They’re optimistic and adaptable, ready to navigate the challenges of the current housing market while creating new trends along the way.
Now it’s important to change your approach to resonate with their expectations. Read on for 23 Legal’s expert breakdown of Gen Z homebuyers and how to make sure your real estate transaction is successful!
Homeownership Demographics in 2024
By 2024, homeownership in the U. S. is changing because of shifts in generations, the economy, and perspectives on life. At the present time, Millennials remain the leading consumers who purchase homes, though Gen Z has shown potential as a rather active population in the housing market. Knowledge of the demographics is therefore of significant importance to assessing this dynamic trend. Here’s a brief breakdown:
- Millennials (aged 27-42) still hold the largest share of the market, making up around 43% of all homebuyers.
- Gen X (aged 43-58) follows at around 24% of the market, with a solid presence among second-time homebuyers.
- Baby Boomers (aged 59-77) represent about 21% of home purchases, many downsizing for retirement.
- Gen Z (aged 18-26) is starting to claim about 12% of the housing market, a notable increase from previous years. Their impact is expected to grow as more of this generation reaches home-buying age.
In terms of gender, both men and women participate equally in the market, but recent trends show that single women are buying homes at a higher rate than single men—19% compared to 9% in 2024. This shift reflects changing financial independence and social values among younger women, including those from Gen Z.
Understanding Gen Z Buyers: What Sets Them Apart?
As for the previous generation, the majority of the millennials became homebuyers with the intention of postponing homeownership because of heavy student debts or financial insecurity, Whereas the new generation of buyers, Gen Z buyers have different goals and hassles. Here are some key traits that distinguish this generation of homebuyers:
- Tech-Savvy: Gen Z is the first generation of digital natives, meaning they are highly comfortable with using technology in every aspect of their lives—including real estate transactions. They rely heavily on online research, virtual tours, and real estate apps when shopping for a home.
- Financially Conservative: Despite being tech-driven, Gen Z is surprisingly prudent with money. Many have witnessed the financial struggles of Millennials and are determined to avoid similar pitfalls. As a result, they are likely to prioritize affordability and be cautious with large financial commitments.
- Desire for Stability: Contrary to the stereotype of young adults constantly on the move, Gen Z values stability and sees homeownership as an important milestone in achieving that. This is driving them to enter the market earlier than Millennials did.
- Focus on Sustainability: People of this generation are particularly sensitive to matters regarding the environment. Environmental friendliness is an important aspect to them, and when seeking homes, they may prefer going for environmentally friendly homes such as energy-efficient homes, solar-powered homes, and homes that have been constructed using environmentally friendly materials.
Gen Z Values and Lifestyles
To successfully connect with Gen Z buyers, it’s essential to understand their values and lifestyles. This generation is looking for homes that not only meet their practical needs but also align with their broader lifestyle preferences. Here’s what you need to know:
1. Affordability and Financial Security
Gen Z is very concerned about the prospect of building a financial future. While they are eager to become homeowners, they are wary of high mortgage debt and large upfront costs. As a result, they may be more interested in affordable housing options, including smaller homes, condos, or properties in emerging neighborhoods with lower price points. Budget-friendly options will appeal to this demographic.
2. Sustainability and Green Living
Gen Z cares deeply about the environment and is likely to choose homes with sustainable features. They are eager in matters concerning the environment, for instance, they consider acquiring machinery, plumbing systems, and homes that have efficient ways of saving the environment including energy and solar-friendly homes. Living in eco-conscious communities that promote recycling, green spaces, and sustainable living practices is also a priority for this generation.
3. Tech-Integration and Smart Homes
As a tech-native generation, Gen Z expects smart home technology to be a standard feature. Homes with integrated smart security systems, thermostats, lighting, and appliances are highly attractive to these buyers. Tech-enabled living offers convenience and aligns with their digital lifestyle.
4. Walkability and Urban Living
Gen Z tends to favor walkable communities with easy access to urban amenities. People would like to reside in areas in which they can navigate, cycle or even walk to local stores, eateries, community parks, and other amenities. This generation is more inclined towards areas that are strategically close to public transport and the most happening social precincts, especially in urban areas.
5. Community and Social Connections
Gen Z culture’s prominence on technology they also feel the desire for community. They are interested in places where they can make friends and socialize with other people. Local events, shared spaces, and even communal gardens form some part of their lifestyle and therefore, interact socially.
Tips for Successful Real Estate Transactions with Gen Z Buyers
To successfully close deals with Gen Z homebuyers, real estate agents, brokers, and sellers need to adjust their strategies to meet the expectations of this younger demographic. Here are some tips to ensure a smooth and successful transaction:
Early engagement through digital platforms:
To gain access to Gen Z, home builders must double down on new entry points, as the current landscape suggests that they will rent for longer periods of time. During this extended rental period, the launch of digital apps aimed at early career Gen Z should include tools for budgeting a down payment and monthly mortgage payment, as well as a clear timeline for homeownership.
Design and sourcing with sustainability in mind:
Generation Z’s preferences and values will shape design trends for all generations. For example, the standard model may not suit Gen Z’s multifaceted, on-the-go lifestyles. They also prioritize sustainability and ethics in their purchasing decisions. More than half of Gen Z (56%) think it’s highly important to buy from brands that show they are taking action to protect and preserve the environment. Furthermore, 52% of Gen Z say they avoid buying from businesses that mistreat their employees, so ethical sourcing is an important consideration. As this becomes more feasible and aligns with the values of the younger generation, we may see an increase in demand for ethically sourced, eco-friendly materials and energy-efficient designs featuring amenities such as solar panels, energy-efficient appliances, and water-saving devices.
Simplify financing
Traditional financing protocols, particularly the mortgage application and approval process, should be updated or replaced with more easy and seamless solutions. Furthermore, with many Gen Z students facing significant student loan debt and high living expenses, financing options and budgeting assistance can be tailored to their specific budgets.
Leverage Technology
Since Gen Z buyers are highly tech-savvy, use technology to your advantage. Offer virtual tours, video walkthroughs, and interactive floor plans to engage them from the start. A user-friendly website or app can also streamline the buying process, making it easier for them to explore listings and gather information.
Conclusion
Gen Z homebuyers are entering the housing market with their own unique set of values, priorities, and expectations. To ensure a successful real estate transaction with this tech-savvy, environmentally conscious generation, it’s crucial to adapt your approach. By understanding their preferences—such as affordability, sustainability, and community—you can position yourself to make a lasting connection and close deals efficiently.
Looking to purchase your first property? Contact 23 Legal’s expert attorney, Ben Weaver, for personalized guidance through the entire home-buying process. Make your homeownership journey a smooth and successful one!
Sell Your Home in 2024 with 23 Legal
Selling a home is often difficult as it is, and even more so in today’s complex market. But it’s not impossible – especially with the right team on your side!
Gen Z buyers are coming in strong, equipped with information and a professional agent by their side. By catering to their priorities, lifestyle needs, and interests, your chances at selling quickly are much better. We highly suggest hiring a local realtor and trusted attorney to make your home sale as smooth as possible. Read our previous blog about how to make a profit on the sale!
With decades of real estate law experience, Ben Weaver is very familiar with the Illinois’ real estate market and well-versed in understanding buyer preferences. 23 Legal’s clients also benefit from Ben’s excellent negotiation skills, coveted local contacts, and his attention to detail when reviewing documents. Connect with us today to discuss the best strategy for selling your property!
Planning to sell your property and start a new chapter? We can help!
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Why Choose 23 Legal
23 Legal offers Real Estate and Estate Planning legal services to individuals, families, community associations and small business owners throughout Chicagoland. We know how intimidating “the law” can be. In fact, when most people think of law offices, they think of stuffy leather chairs, huge wooden desks and pompous lawyers who charge outrageous fees. That’s not us! We believe in 1-to-1; the same lawyer should work with you all the way through. Whether you have an estate planning issue, family trust concern, or you have a legal problem in regard to a new home, business, real estate or remodel, you need a lawyer who cares. That’s where Ben comes in! We are great listeners; more than that, we are lawyers who believe that our clients always come first.
