Future Of Homebuyers
Throughout the past 18 months, we have seen many people become first-time homeowners. Many of these adults took the leap from renting to homeownership to take advantage of the benefits received when owning a home. Quite a few of these new homeowners come from a younger generation, one looking to take their first step into adulthood. Generation Z have began purchasing homes for the first times, and they will eventually shape the home buyers landscape for the near future. For those in this generation who think homeownership is a far reach, think again. The sooner one starts planning to become a homeowner, the more likely that they will achieve this goal sooner than later. Here is some information on the future of homebuyers.
Gen Z Are The Future Of Homebuyers
With the majority of Gen Z yet to enter the housing market, a large portion of the generation has began to plan on doing so. According to a report from realtor.com, close to 70% of Gen Z would rather purchase a home than rent a home in the future. Many of these members of Gen Z realize that homeownership has benefits that you do not get when you are renting. From George Ratiu, Manager of Economic Research for realtor.com:
“With nearly three-quarters of those surveyed preferring to buy versus renting long-term, the housing industry should be prepared for millions of Gen Z buyers to bring a new wave of demand along a similar stage-of-life timeline as the millennial generation before them.”
Why Does Gen Z Want To Be Homeowners?
There may be confusion about why so many young people want to be a homeowner when they are still trying to figure out careers and where to be. However, according to Home Buyers and Sellers Generational Trends Report from NAR, young homebuyers are more motivated to buy a house because they want a place of their own. These members of this generation understand that renting a place might be a place to call home, but you are not actually owning the place you live. Being able to call somewhere you live yours, and not your landlords, has benefits that reach past financial aspects. There are plenty of reasons to own a home, and many of these reason are non-financial reasons to own a home.
One of the biggest reasons that people want to own their own home is because they can do and treat the home however they want. For those who have rented, you know there is limitations to customizations on your property. If you want to paint and customize to your own person liking, you need approval and are stuck making minimal changes. Even hanging up paintings can cost you if you leave holes in the wall. Whether you want to decorate with your own decor, paint, or renovations, you need to own your home if you want your creative freedoms. For those who do not know, landlords are not always the most friendly or willing people to allow you to do things to your property.
Owning A Home Provides Long-Term Stability
It is also worth mentioning that real estate is considered the best long-term investment in America. During times of high inflation, home prices also tend to go up. When you rent a home, you do not gain this equity in your property. Your landlord continues to receive their mortgage payments from you, all while gaining equity and getting richer on paper. When you are the homeowner, you gain equity and this contributes to your net worth. Real estate provides long-term stability, and can even create a hedge against inflation.
With renting, you lock in a monthly payment and you pay that payment until your lease is up. However, when you lock in a 15 or 30 year mortgage, you are still making the same payments, regardless of the market. This allows you to be able to use your budget to pay for other goods that increase in price.