It’s no secret that millennials have faced obstacles to homeownership unlike previous generations, but gen Zs could break that trend. A study from Zillow published December 2019 says that gen Zs are more likely than millennials to own a home by the time they reach the ages of 35-44.
Experts agree that’s for a variety of reasons. For one thing, the housing market is likely to become less crowded and instead be more organized and tailored to an individual client. Policies that work in favour of the client will be implemented by realty agencies. Finally, homebuyers will be more agreeable to living and working in more remote but less expensive areas. Did you see our list of the top five places to live and work remotely in Canada?
Let’s face it — times have been tough all around. Even before the pandemic, things weren’t exactly easy for the younger generations. Millennials and Gen Z struggles include working multiple jobs simultaneously to afford exorbitant rent prices in convenient metropolises, or no jobs at all and wondering where the rent will come from.
Gen Zs and millennials, while a generation apart, aren’t so different in that sense.
Something which sets gen Zs apart is that they’re willing to compromise on almost anything in order to save a little money. That may be one reason they’ve managed to get ahead in the home buying market. The more practical but less accommodating millennial is less likely to settle for a lack of essential comforts in a home, and may spend years saving for the space and amenities they feel they require. However, in this housing market, flexibility is key to getting your foot in the door.
In fact, it’s the number one obstacle for young people who want to buy a house within the next five years. That’s 83 per cent of them, according to a study by Property Shark from September 2018.
But experts expect student loan debt to decrease in the coming years. According to a StatCan study from 2013, a total of 38 percent of graduates surveyed had entirely paid off their college debt after three years.
In the past, renting has been preferable to buying because of the comparative expense. Renting also alleviates responsibility of having to fix major unavoidable defects in a home, like a roof replacement, that can add up for a homeowner. However, mortgages are more affordable now than they were for older millennials with fixed-rate mortgages being locked in at 1.5% in some cases. That’s why experts say more gen Zs are expected to switch from renting to buying in the near future.
In many cases, mortgage payments and property taxes on starter homes and condominiums are less expensive than the going rental rates in major cities.
While gen Zs will do almost anything to keep their costs at a minimum, they also have big dreams of spacious houses with lots of amenities. Millennials on the other hand, are a little more realistic about their assets. They’re also the most pessimistic generation when it comes to homeownership.
This may have something to do with social media. 24-year-olds’ social media accounts are usually more optimistic, often littered with artful vino balcony selfies and sunny vacation photos.
And then conversely, we’ve all seen the millennial memes on Instagram and Facebook. “Millennials will never own homes.”
The fact is, millennials were kind of given the short end of the stick when it comes to debt. When compared to previous and successive generations, millennials were left in the economic gutter. Canadian millennials took on a median debt of $35,400, compared to that of $19,400 for gen-Xers.
However, the good news for millennials is that their assets are stronger than previous generations. Millennials accumulated a median of $154,100 in assets, compared to $76,700 for gen-Xers.
To sum it all up: gen Z, your time is now. And millennials, your time is not over — no matter what the memes say. Young people, get out and find yourselves a great realtor and start looking for your ideal home today!
… Before interest rates go up.
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