Home prices and rent are soaring faster than wages. This shattered home buying plans of generations Y and Z and put them in a rent squeeze as well.
This article was originally published by MishTalk.
Things have really changed in three years according to Yardi’s latest Generational Survey on Homeownership Dreams.
Three years ago Yardi found that Gen Z was enthusiastic about the prospect of owning a home, whereas Millennials were pessimistic about their homeownership outlook.
Nearly two years into the COVID-19 pandemic and its economic and societal fallout Yardi has different findings.
Key Takeaways From Latest Survey
• Affordability concerns have noticeably risen in the past 3 years, with home prices unaffordable for 66% of renters.
• 1 in 5 adults living with family say they can’t afford rental costs while 56% of non-owners have nothing saved for down payment.
• Gen Z’s expectations for homeownership tempered in last 3 years with increasing concerns around credit scores & job security.
• Millennials are still behind homeownership, with 55% of them dissatisfied with their current home – the lowest of any generation.
• Nearly 40% of Millennials & Gen Z postponed buying a home due to the pandemic.
• Suburbia becomes top option for Gen Z and even formerly city-minded Millennials, while Gen X’s interest in rural living grows
• 38% Live With Parents
• 33% Rent
• 29% are Homeowners
In the previous survey 83% of Zoomers expressed a desire and planned to buy a home within five years of 2018.
Only 29% of adult Zoomer respondents are now homeowners.
Millennials the Most Disgruntled Generation
• Millennials remain the most disgruntled generation, with respondents from this generation reporting the lowest levels of satisfaction with their homes (55%), as well as the highest levels of outright dissatisfaction (17%).
•For Gen Xers, the home’s state of repairs is the most significant worry with one in five dissatisfied with it, while more than one in five Millennials and Gen Xers are unhappy with the size of their home.
• 26% of all respondents who were unhappy named the home being too small as the main factor. This was closely followed by insufficient space for work and insufficient space for recreational activities, while one in five named overcrowding as the main factor. Only 3% of our pool of respondents said that their home was too large.
Just over half (52%) reported no effects on their homeownership plans, while 41% of Millennials and 36% of Gen Z non-owners had to delay buying their own homes. Furthermore, 4% of all non-owners reported losing their homes due to COVID-19, with Millennials most affected at 5%.
With the eldest Gen Xers now 56 years old, elder Millennials looking at 41 this year, and the forefront of Gen Z hitting 27 in 2022, homeownership rates among respondents from the three generations stand at 78%, 64% and 29%, respectively.
So, what’s keeping 22% of Gen X, 36% of Millennials and 71% of adult Zoomers out of the housing market?
The main issue is affordability. Of all non-owners who participated in our survey, 53% view today’s housing market as just as inaccessible or even more inaccessible than in 2018, with Millennials most pessimistic. And, for those living with parents or other family members, the outlook is even more stark than it is for renters, with 59% of Millennials who live at home feeling that the prospect of homeownership is now even further removed.