Study Reveals Financial Concerns Influencing Gen Z and Millennial Homebuying

The report goes beyond traditional metrics of homebuying readiness like savings and credit, focusing instead on how factors such as financial anxiety, shame, self-belief, and uncertainty impact buying decisions.

Findings reveal that over half of participants feel anxious about their financial futures and harbor skepticism towards experts, regardless of their income levels or savings practices. "Money is emotional," said Messerli. "More than half of the total market is anxious or avoidant with their finances. There's a big opportunity for those who learn how to reach and serve them."

The study found that 66% of respondents worry their finances won’t last, including many with strong savings habits and incomes over $100,000. Additionally, 60% reported being overwhelmed by the amount of homebuying information available.

Financial shame is prevalent, with nearly 90% of respondents experiencing some level of shame concerning their finances.

Despite these concerns, many respondents maintain a positive outlook on achieving financial goals and view homeownership as a significant source of financial security. More than half expressed confidence in reaching a financial goal they set, and 60% believe owning a home would provide greater security than any other financial choice. However, 43% also feel that a mortgage could be a trap.

The report includes seven recommendations for housing professionals but emphasizes the need for a broader dialogue on how to engage potential buyers more effectively.

"These buyers want to own a home. They’re waiting on someone they trust," said Bri Lees, a marketing expert and board member at FirstHome IQ. "This study is a starting point for better discussions on improving access for the next generation."

The findings indicate that many financially capable Gen Z and millennial individuals are held back by psychological or informational barriers from initiating the homebuying process. Ralph Remy, senior director of client digital experience at National MI, noted, "The mortgage industry has typically assessed readiness through income, assets, credit, and savings. This research suggests there's another side of the equation."

Remy highlighted a notable knowledge gap regarding down payments, mentioning that many consumers mistakenly believe they must provide a 20% down payment to purchase a home, despite the availability of lower options through private mortgage insurance.

"At National MI, we’re committed to helping lenders address these barriers and dispel common homeownership myths, creating more informed and confident pathways to sustainable homeownership," Remy stated.