Younger Americans are more interested in
The millennial cohort was slightly behind, at 59%, but older demographic groupings were more reticent at 45% of Gen X and 21% of baby boomers, the 2024 ServiceLink State of Homebuying Report found.
Other studies have shown that baby boomers'
But
Gen Z members who are current homeowners and have an average interest rate of 5.4% would consider going as high as 6.3% in 2024, the survey found. This is compared with millennials, who, with an average interest rate of 5.2% would be willing to go 100 basis points higher at 6.2%; Gen X, current average 5%, who would consider 5.8%; and baby boomers, with a current interest rate of 4.6%, have the least tolerance to pay higher, just 0.4 percentage points at 5%.
"This is an interesting and pivotal moment in the housing and mortgage industries as the younger generations are not only determined to buy but are seemingly undeterred by the higher price tags and interest rates," said Dave Steinmetz, president of origination services at ServiceLink, in a press release. "Our study suggests that Gen Z and millennials are poised to impact the market in several ways including purchase, refi and home equity, which is an opportunity for lenders to educate and usher these younger buyers through the process."
The younger generations had a more optimistic view of the housing market in 2024, with 56% of Gen Zers and 51% of millennials believing that conditions for buying were favorable, compared with 38% of Gen X and 18% of baby boomers.
That is a better result than the
The ServiceLink survey, primarily conducted in early December, had 1,519 respondents who purchased or tried to purchase a home in the past four years. It was made up of equal parts men and women and had an even distribution between all four generations likely to buy a house.
But the results were not all that positive when it came to the respondents' views on rates. The survey showed that 42% of those considering buying a home in the past 12 months (68% of that group claimed to be "very serious" about that) gave up the quest.
Among the top five reasons, rates being too high tied with options being too expensive in the No. 1 slot with a 40% share. The financial situation changed for one-third of the respondents, while 30% claimed it was economic and political instability. Too large of a down payment was cited by 29%.
For those looking to buy this year 45% said interest rates being too high would stop them from making a purchase, followed by40% lacking the funds for a down payment, 39% said where mortgage rates were at the time of the survey, 39% responded the limited for sale inventory and 34% felt they would be unable to secure a mortgage.
When it came to getting the funds for their down payment, 68% used cash or savings. But 24% tapped their 401(k) retirement account, with millennials most likely to use this source. While just 11% said they pooled funds with friends, Gen Zers being
Meanwhile, the younger cohorts, those most likely to have the least seasoning on their current mortgage, were also the groups that would probably refinance in 2024. Just shy of 80% of Gen Z and 72% of millennials were likely or somewhat likely to refi this year.
But 78% of baby boomers said that they would not refinance.
Among the reasons why those who planned to refi this year would do so, 27% said getting a lower rate, while 22% planned to use the money to fund home improvements and 16% would use the proceeds to pay off debt.
