Gen Z would rather relocate than stretch their budget, study finds

(InvestigateTV) — Gen Z is just beginning to enter the housing market, and for this generation, relocating appears to beat stretching a budget.

A new study from NewHomeSource found 63% of Gen Z respondents said they would move to a cheaper area within their state or to a more affordable state to buy a house, while just 19% said they would stretch their budget to make homeownership work where they currently live.

Ali Wolf, chief economist at NewHomeSource, said the generation’s enthusiasm for homeownership stands out.

“An amazing thing that we found is that Gen Z overwhelmingly want to become homeowners,” Wolf said. “Think about how that stands in direct contrast to Millennials, where as they were getting older there was a lot of discussion of Millennials wanting to rent, wanting urban living. Gen Z is saying, ‘Actually, I want to buy,’ and over 50% of us want to buy in the suburbs.”

Wolf said young buyers who feel anxious about the homebuying process are not alone, and recommends doing research before meeting with a lender or agent.

“Learn about the terminology, and once you feel comfortable with that, start to think through what are your must-haves, what are your non-negotiables,” Wolf said. “And then you can talk to a loan officer. They’ll look at your debt, they’ll look at your income, and they’ll help you understand what you can comfortably afford.”

Wolf said homebuilders are aware of the affordability challenges buyers face and are sometimes cutting prices, covering closing costs or buying down mortgage rates to help buyers afford new homes. While traditional resale homes may make sense for some buyers, Wolf recommends not limiting a home search, since a new build could also help buyers reach homeownership.