The desire to own a home remains strong among Gen Z, with a majority expressing their intent to buy in 2025. However, affordability concerns—rising mortgage rates and skyrocketing home prices—are making this dream harder to achieve. A recent ServiceLink 2025 State of Homebuying Report sheds light on the challenges and shifting trends in the housing market, particularly for young buyers.
Gen Z’s Eagerness to Buy—But At What Cost?
According to the report, 67% of Gen Z respondents plan to buy a home this year, leading the way among generational groups. Yet, they are also the most likely to abandon the process due to financial barriers. In 2024, 58% of Gen Z buyers walked away from their home purchase due to high costs, and many have struggled to finalize deals over the past four years.
Market Sentiment: Hopeful Yet Cautious
Despite financial hurdles, 52% of Gen Z buyers believe 2025 is a good year to buy a home, compared to just 23% of baby boomers. However, tolerance for high mortgage rates is dropping. While Gen Z buyers currently carry an average 5.1% mortgage rate, they are only willing to accept rates up to 5.8%, marking a decline from 6.3% last year.
Shifting Buyer Preferences & The Rise of Tech
As the market evolves, younger buyers are placing a premium on larger living spaces and technology-driven transactions. 66% of Gen Z buyers prioritize spacious homes, reinforcing the shift toward remote work and flexible lifestyles. Additionally, digital tools such as eSigning and virtual closings are becoming essential, as buyers seek convenience in the homebuying process.
What This Means for Lenders & The Future of Housing
Lenders and real estate professionals must adapt to the growing influence of technology and provide transparent financial education to empower first-time buyers. Gen Z’s expectations for streamlined, digital interactions will likely shape the future of real estate.
While affordability challenges remain, the demand for homeownership among younger buyers is undeniable. With a combination of patience, informed decision-making, and technology-driven solutions, Gen Z may still turn their homeownership dreams into reality.
SOURCE: nationalmortgageprofessional.com (Kathryn Fitzpatrick)
