AUSTIN (KXAN) — The already-booming housing market in Central Texas could become even more competitive very soon and Generation Z — people between the ages of 18 and 23 — could be the reason.
A new study from Bank of America found more than half of Generation Z — people born between 1995 and 2005 — are already saving up for a down payment on a home.
“Definitely did not see it coming,” said Kevin O’Toole, Area Lending Manager at Bank of America. “It’s a shift from the millennial generation.”
According to the 2019 Spring Homebuyer Insights Report, the majority of Gen Z said they want to buy a home in the next five years.
“We’re definitely seeing more and more interest from that age range,” O’Toole told KXAN. “We have had probably four or five within that range close so far this year. And again, it’s surprising.”
O’Toole said millennials are often criticized for renting, rather than owning, but there’s a reason many millennials have been shy about buying.
“There’s a big part of that psychology around the crash that happened in 2008,” O’Toole explained, so instead of a home, they’re spending their money on trips or events.”
“You see a bunch of millennials spending money on vacations or going to music festivals and stuff, which is awesome, you know, it’s good to have those memories, but they’re not really assets,” said Lauren Pettinati, who lives in Austin and is Gen Z.
She said she’s not too surprised to hear more than half of people her age are wanting to buy homes in the next five years because that’s what she hopes she’ll be able to do, too.
“Right now, I’m working part time as both waitress and bartender at a country club while I’m working towards my degree in nursing,” she said.
The report did find, however, Gen Z is no different than other potential homebuyers because they consider saving up for a down payment a daunting task.
But most are willing to do whatever it takes to beef up their savings accounts.
“I guess making those little sacrifices here and there, maybe not traveling every year, maybe not having a big wedding, going to cheaper school, that sort of thing,” said Pettinati.
The Bank of America report also said most Gen Z plan on asking for help with their down payments.
21% of those surveyed said they’ll ask their parents, and 17% said they’ll utilize down payment assistance programs.
Pettinati said she’s looking forward to “having something, something to my name, an asset that I can either sell down the road or pass onto my kids.”