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Anticipate what comes next by better understanding the generational dynamics already changing your workforce and consumer landscape.
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Gen Z represent less than 20% of the US population today, but what they lack in numbers, they make up for in influence – and in a big way. Through ever-shifting digital platforms, outlets and apps, they are transforming society from their phones – largely due to an unprecedented, innate facility with technology.
Gen Z, the generation born between 1997 and 2007, are in the early innings of their working years. But as the elder members of Gen Z consider how – or if – homeownership fits into their future vision, they carry considerable influence in how the housing market evolves in a world shaped now more than ever by technology.
The housing market has traditionally been a bellwether of US economic health, and a long-established means to wealth creation. This is understood by Gen Z, as over half of Gen Z report that they are currently saving for their first home.1 But even those in the market face elevated interest rates, a high cost of living and a low housing supply. Gen Z represents just 4% of homebuyers today2 and may not follow the traditional path of generations before them.
As homeownership companies – including homebuilders and lenders – shift the focus to the next generation of buyers, they must innovate their approach to appeal to Gen Z: inherent challengers of the status quo whose desires and expectations are vastly different from those of the generations prior.
If homeownership is their goal, Gen Z want it on their own terms. With challenging housing market conditions, the industry should evolve to meet the expectations of this new generation of customers. Gen Z will require the homeownership industry to adapt to meet their most intrinsic needs: transparency and authenticity, ease and intuitiveness, and pragmatism.
The DNA of Gen Z
Before digging deeper into how Gen Z might influence the housing market, it’s critical to understand how their environment has shaped their view of the world.
While all generations have been influenced by technology, Gen Z are the first for whom technology has been fully immersed in all parts of their lives – homes, education and workplaces – since birth. For these digital natives, seamless, intuitive experiences backed by technology are as natural and expected as indoor plumbing and electricity.
In tandem, they also have a keen skepticism that recognizes everything shared – online or in person – isn’t always true. In fact, two-thirds of Gen Z believe that most people can’t be trusted, and they especially have difficulty putting trust in large organizations. Access to technology has given Gen Z a front-row seat to study a highly polarized world, particularly on the backdrop of global crises that have occurred since their early years. Within their short lifetimes, Gen Z have had immediate, unfiltered access to economic recessions, acts of terrorism, corporate scandals, mass shootings, extreme weather events, extreme political discord and a global pandemic. And divisions over these topics have only fueled their inherent skepticism, which they are carrying into adulthood.
Three pivotal traits of Gen Z
Early life experiences and access to technology have all contributed to certain traits that have come to define Gen Z. Homebuilders and lenders will need to consider these traits to market to this new generation of homebuyers: