Introduction
Despite changing cultural influences, milestones and priorities, 70% of first-time homebuyers spanning three generations still believe in homeownership as part of the American Dream. Today, that dream looks less like a Norman Rockwell painting and more like a patchwork quilt, with each generation having very different experiences achieving their dream of homeownership.
The Zebra surveyed 1,205 first-time homeowners to discover what the experience of buying and owning a home has been like for them. We found shifting priorities and sentiments as homeowners aged:
- Generation Z was the most racially diverse generation of first-time homeowners, and the generation putting the most pressure on themselves to buy a home.
- Millennials were the most financially prepared generation, and the most stressed out by the homebuying process.
- Generation X believed the most in homeownership as part of the American Dream, but had mixed feelings about owning their first homes.
Let’s take a look at these three generations of homeowners in depth.
Generation Z: The newbie generation
Generation Z homeowners, aged between 18 and 23, are most motivated to buy a home by the desire to live in a better area. They’re much younger than the typical first-time homebuyer; accordingly, parents had the most influence on Gen Z homeowners during the buying process.
- 56% rely on their parents as their top source of advice while going through the homebuying process — more than any other generation. In fact, they’re almost as likely to rely on their parents for advice as they are to depend on a real estate agent: Only 61% of Gen Z homeowners hired one, compared to 67% of Gen Xers and 72% of millennials.
- 44% move straight from their parents’ homes into their own.
Thirty-four percent of Gen Z homeowners said they put pressure on themselves to buy a home, the most of any generation. Still, they’re often underprepared for the realities of homeownership:
- They’re 14% likelier to plan for home furnishings and decor than to compare home insurance policies, and 20% likelier to plan decor than compare home loans as part of their preparations for homeownership.
- Gen Z has the largest share of uninsured homeowners, with 15% reporting that they have no home insurance.
- 56% have emergency funds of $1,000 or less, falling short of financial experts’ recommendation to have 1-3% of a home’s value saved for repairs.
Gen Z homeowners have the lowest incomes of any generation, with 63% making $75,000 or less and 32% making $50,000 or less, compared to the American median household income of about $60,000. However, they’re still making their way into homeownership by purchasing smaller, less expensive homes. They’re also by far the most racially diverse generation of homeowners.
Demographics: Gen Z vs. America
| Gen Z homeowners | American population | |
|
American Indian/Alaska Native |
1.0% | 1.3% |
| Asian | 9.1% | 5.9% |
| Black | 20.2% | 13.4% |
| Hispanic/Latino | 18.2% | 18.5% |
| Native Hawaiian or other Pacific Islander | 1.0% | 0.2% |
| White | 59.6% | 76.3% |
Millennials: The money-minded generation
Millennials, aged 24 to 39, are the largest group of first-time homebuyers, accounting for three out of five survey respondents. They’re also the most financially savvy generation:
- 35% of millennial homeowners cite building equity and making a financial investment as their top reason for wanting to buy a home.
- Millennials are the most insured generation — 88% have a home insurance policy.
- 34% had emergency funds of over $2,000 (compared to 33% of Gen X and just 23% of Gen Z).
Millennials are also motivated by their new and growing families as they search for their first homes:
- 31% of millennial homeowners cite having children or improving life for their children as one of their top reasons for buying a home.
- 59% have at least one child in the home.
- 35% bought homes that were at least 2,000 square feet.
Nineteen percent of millennial respondents report that stress was the most difficult part of the homebuying process. That figures — they put more work into preparing for their home purchase than Gen Z or Gen X:
How did each generation prepare for their home purchase?
| Gen Z | Millennials | Gen X | |
| Saved for a down payment | 79.8% | 82.3% | 78.9% |
| Hired a real estate agent | 61.1% | 72.3% | 67.3% |
| Toured neighborhoods | 68.2% | 72.2% | 71.8% |
| Compared home loans | 63.1% | 70.5% | 68.0% |
| Compared home insurance | 66.7% | 70.1% | 63.9% |
In all, millennials buck stereotypes about their generation, showing a great deal of financial intelligence during the homebuying process. (And, rather than living with their parents or family, 75% were renting a house or apartment before they bought their home.)
Generation X: The aspirational generation
About one in four first-time homeowners belong to Generation X (between 40 and 55 years old). Gen Xers are more motivated than their younger counterparts by the dream of being homeowners:
- 44% cite wanting to achieve the goal or milestone of homeownership as a top reason to buy a home.
- 79% of Gen Xers say that they believe in homeownership as part of the American Dream.
Recent research has indicated that Gen X has the largest amount of outstanding debt. Their home purchases may have only added to it:
- 69% of Gen Xers agreed that paying rent is “throwing money away,” but…
- 39% of Gen Xers paid at least $300,000 for their home. That’s well above the national average, which sits in the low 200s.
Gen X also has the strongest and most mixed feelings about homeownership. On one hand:
- 23% of Gen X homeowners miss their landlords.
- 23% regret buying a home.
- 50% say that homeownership is harder than they expected it to be.
On the other:
- 88% of Gen X homeowners say they love owning their home.
- 74% say they wish they’d bought a home sooner.
Gen X homeowners trust their spouses and partners the most of any generation, with 50% saying that’s who they primarily relied on for advice while looking for homes. Gen X was also the most equitable generation in terms of gender: They’re the only generation with more men depending on their partners for home-shopping advice than women.
Who relied on their spouses for advice while home shopping?
| Women who relied on their partners for advice | Men who relied on their partners for advice | |
| Gen Z | 42.9% | 21.7% |
| Millennials | 59.4% | 41.2% |
| Gen X | 46.7% | 51.7% |
Conclusion
As generations age, their attitudes and priorities as homeowners change. So what can future first-time homeowners take away from these three generations’ experiences with being first-time homeowners?
- Like Gen Z, you may not have to wait as long as you think you do to buy your first home.
- Like millennials, it’s good to thoroughly consider your budget and risks while you’re shopping for a house.
- Like Gen X, be prepared for the ups and downs of homeownership. It’s a lot of responsibility and a lot of reward.
Methodology
The Zebra’s report presents the findings of an anonymous online survey of 1,205 homeowners from all 50 states and Washington, D.C., ages 18-85 who purchased their home between six months and three years prior to taking the survey. The survey was conducted by independent research firm SurveyGizmo from August 7-12, 2020, and the results were reviewed for quality control.
U.S. demographics and median household income are taken from the U.S. Census Bureau.