The American Dream Is Still Alive For Gen Z Consumers

Millennials and Gen Z prioritize financial freedom first and homeownership second

As student debt rises, so does the median age of American homebuyers. While homeownership may appear unpopular to younger generations, data shows that millennials and Gen Z are still in pursuit of property — just later in life.

Also of note is that younger generations aren’t entirely digital. While they don’t want to be cold called, they do want to be able to talk to a human when needed.

FinLocker, a data analyst that focuses on consumers’ financial data, recently partnered with students in the American Marketing Association’s group at the University of Southern California to survey millennials and Gen Z consumers on their financial habits. The survey was inspired by the National Association of Realtors’ 2022 study which identified that 43% of homebuyers were millennials and 2% of homebuyers were Gen Z buyers aged 18 to 22.

Over a four-week period from mid-March to mid-April 2022, USC students interviewed millennials and Gen Z.The survey was designed to answer how the next generation of homebuyers manages their finances and how financial goals can be achieved by younger generations. More importantly, the data raises the question of how can mortgage professionals cater to a generation of young homebuyers?

Prabhakar Bhogaraju, executive vice-president and the head of strategy & product development at FinLocker, said that both generations regarded financial freedom and owning a home one day as their two top priorities. Bhogaraju said that mortgage professionals should take notice of the median homeowner age rising due to spiking home prices and student debt, specifically with Gen Z consumers. The survey results indicate that student loan payments are the primary reason for delaying young people from buying homes.

A recent survey by LendingTree also pointed out that first time homebuyers have multiple misconceptions about homeownership and affordability. National Mortgage Professional reported that around 80% of prospective first-time homebuyers, out of 2,000 survey participants, are stressed about affording a down payment. 27% of those who have never owned a home say that down payments are the main barrier holding them back from homeownership.

In order to streamline the homebuying process to young consumers, Bhogaraju recommends that professionals educate younger potential buyers on financial and mortgage literacy, as only one-third of survey respondents said they felt properly educated about the homebuying process.

“Even though the main goal of millennial and Gen Z consumers is to be debt free, they should use buying a home as a vehicle to become [financially] free,” Bhogaraju said. “[Buying] a home is an investment.”

Raised In A Digital Age

Young homebuyers don’t want to settle their finances on paper anymore. Bhogaraju said that the survey found that Gen Z and millennials tend to do their banking and credit management online, leading him to predict that mortgage companies will do their best marketing on online platforms in order to reach younger clients. Granted, this generation recognizes online banking and documents as the norm already.

The survey identified that Gen Z opted to check social media first to learn about personal finance. According to Bhogaraju, several apps, including YouTube, Instagram, TikTok and Facebook, are leading digital platforms for mortgage professionals to reach younger audiences, and potentially even winning over clients.

“Younger users want bite-sized pieces of information to consume. They’re not going to listen to a long video drone about mortgages,” Bhogaraju said. “Emerging channels should incorporate [the] mortgage industry into consumer’s daily life as if it’s right next to gaming and entertainment.”

With the mortgage industry constantly fluctuating, Bhogaraju predicts that Gen Z will be the most diverse set of homebuyers as minorities begin to buy homes and invest. “The growing Hispanic population will drive home buying growth,” he said. “With this information, it’s important that mortgage professionals learn the value systems of their clients.”


“Younger users want bite-sized pieces of information to consume. They’re not going to listen to a long video drone about mortgages.”

– Prabhakar Bhogaraju, executive vice-president and head of strategy & product development, FinLocker


Bhogaraju also mentioned that it is important to recognize the wealth and opportunity gaps between white and racial minority buyers. He also said that since the survey was mostly of affluent Californians, data may be limited on nationwide financial habits in young buyers. “Home price affordability will continue to be a constraint on buyers,” Bhogaraju said. “Low home supply will also affect low to moderate incomes, which are predominantly minorities.”

Approaching Buyers

Charlie Rez, a USC Economics and Data Science student and FinLocker intern that participated in the study, reiterated that Gen Z “finds solace in talking to a real person” and more than anything wants transparency.

Rez said that if he were buying a home, the last thing he would want is being approached out-of-the-blue by a mortgage professional. Rez said, “The best way to create a trusting relationship would be through apps like TikTok and YouTube, where communication between you and a client is easy and simple. A relationship can be built solely off the fact that at any given moment, someone could get an answer to their mortgage question by leaving a comment on your post or through a direct message.”

Rez’s opinion correlates with other Gen Z survey respondents that reiterate that social media may be the best way to reach younger clients. He also expressed that homebuying was his goal following graduation.

“People don’t want to learn about big financial decisions from reading an article,’’ Rez said. “We value trust and relationships over pure information, especially regarding bigger life decisions.”

This article by Sarah Wolak was first published in National Mortgage Professional.

To receive a copy of the research paper, The Financial Habits of Future Homebuyers, visit the FinLocker Business Building Center.

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