• Gen Z homebuyers look for affordability, sustainability, and smart home features.
  • This generation conducts extensive online research and prefers communication via text or social media.
  • Key challenges include student debt, rising home prices, down payment affordability, and financial literacy gaps.
  • Buyers need digital-first services, transparent guidance, and insights into down payment assistance or first-time buyer programs.[1]

Gen Z homebuyers are tech-savvy, value-driven, and financially cautious, making them a unique and growing segment of the real estate market. Real estate agents can better serve this generation by embracing digital tools, leading with transparency and education, and focusing on lifestyle-driven choices coupled with affordability. Here's what agents need to know about working with Generation Z.

Who Are Gen Z Homebuyers?

Generation Z is a digitally native and diverse generation that has never known a world without smartphones, social media, and instant access to information. This makes this group highly informed, research-driven, and value-conscious, all traits that strongly influence how they approach the homebuying process.[2]

Generation Z buyers were born between 1997 and 2012 and are now entering their prime years for purchasing homes. They're doing so on their terms, which means real estate agents must understand this group's unique psychology, motivations, and expectations to build rapport, earn trust, and close deals.

These young buyers should be an urgent priority for many real estate agents. As the National Association of REALTORS® (NAR) states, "nearly 65% of Gen Zers say they're eager to jump into homeownership in the next five years."[3]

What Gen Z Homebuyers Value and Expect

Selling to Gen Z homeowners requires acknowledging their tech-savvy and cautious nature. They're looking for flexibility and value, as well as alignment with personal and social values.[4] When purchasing a home, they want something beyond curb appeal and square footage.

There are some specific issues you can consider to prepare for the influx of Gen Z buyers in the coming months and years. Real estate agents who do this will be better prepared to meet the challenges of selling to Gen Z clients and helping them find the right homes for their needs.

Affordability

Home ownership is an important goal for many Gen Z buyers, and affordability may be one of the most important factors to consider when understanding this population of prospective buyers. Buyers in this group often have student loan debt and are concerned about high interest rates. They may have entered the workforce during a time of economic uncertainty, leaving them budget-conscious. They don't want to overextend themselves, and that may be reflected in their homebuying choices. They may also have concerns with being able to afford the down payment and closing costs required to purchase their first home.

Location With Meaning

Smaller cities and suburban areas can appeal to Gen Z buyers, as can urban options and even rural living situations with a sense of community and access to amenities. A lot of the workforce remains remote, so remote-friendly employers may also be a selling point for Gen Z. Other strong draws for a meaningful location are public transit, walkable areas, and nature opportunities like parks and green spaces.

Sustainability

Environmental issues are important to many Gen Zers, and that means options such as energy-efficient homes, smart thermostats, solar panels, and eco-friendly building materials have strong appeal. Naturally, Gen Z includes many people, and there will be some differences, but generally, these buyers may look for more sustainable options.

Tech-Readiness

In most cases, Gen Z buyers expect their homes and homebuying experiences to be tech-enabled. Smart home features like app-controlled lights, locks, and appliances are major selling points, but it's not just about what they can find in the home. 

It's also about what their real estate agent brings and how they communicate.[5] Selling to a Gen Z homebuyer should include virtual tours, digital paperwork, and fast, mobile communication. The easier it is for buyers and their agents to stay connected and interact quickly, the more comfortable many Gen Z homebuyers may be.

Personalization and Aesthetics

Gen Z buyers were raised on Instagram and TikTok, giving them a strong sense of design and a desire for personalized spaces. They may choose starter homes with smaller footprints, but they want to make these spaces their own. That includes cosmetic updates and the potential for larger renovation projects to customize their new home to meet their personalized needs.

Transparency and Trust

Honesty and social proof tend to matter for this homebuying generation. Expect them to read reviews, Google your credentials, and verify any claims. Many of these home buyers may also find it important to choose a reputable lender that has been recognized for providing an exceptional home lending experience. This could include doing online research for which lender has the best client reviews and/or has won awards for being the best in the industry.

How Gen Z Shops for Homes

Gen Z often starts their home search on their phones. They scroll listings during lunch breaks and watch YouTube tours of neighborhoods, which means digital content heavily influences their search and the homes they want to tour in person.[6]

Before Gen Z homebuyers contact an agent, they may already know about school districts, flood zones, and comps. They've been on real estate sites like Zillow and Redfin, along with Instagram, TikTok, and YouTube, for information on listings and neighborhoods. Agents who maintain a presence on these platforms build brand recognition and trust.

Like most people, Gen Zers are also influenced by their peers. They rely on reviews, Reddit forums, and friend referrals when choosing an agent or lender.[7] Expect them to look for 3D walkthroughs, drone footage, and FaceTime tours as standard options.

Agents who don't use digital tools or take them seriously may risk losing Gen Z clients before they even make contact.

Key Challenges Facing Gen Z Homebuyers

Despite their enthusiasm for homeownership, Gen Z faces considerable challenges. They'll be looking for agents who can reassure them, provide practical advice, and listen to their needs and goals. Most of them know what they want, and they just need an agent who's open to helping them find it.

Down Payments and Rising Costs

One of the biggest hurdles Gen Z buyers face is saving for a down payment and closing costs. Closing costs alone can range from 3% to 6% of the home loan amount. With student loan debt and inflation, many Gen Zers struggle to build savings while covering rent and living expenses. As a result, they may be more open to down payment assistance programs, co-signers, or unconventional financing options.[8]

Interest Rates and Economic Uncertainty

Many Gen Z buyers entered the market when mortgage interest rates were rising or are now considering buying while interest rates are high. Concerns about affordability and long-term financial stability may delay their decision-making process or shrink their budget, narrowing their options.

Inventory Constraints

Many areas of the country are facing limited housing inventory, especially at entry-level price points. That's creating a lot of competition, including bidding wars and all-cash offers that may be intimidating for first-time buyers.

Financial Literacy Gaps

Gen Z is information-rich, but they might not have deep financial literacy surrounding mortgages, escrow, or home maintenance costs. This may lead to misunderstandings or unrealistic expectations, but working with the right agent can reduce those problems and help close the literacy gap.

How to Work With Gen Z Buyers

Real estate agents who want to thrive with Gen Z clients need to adjust their approach in several areas. If you plan to target Gen Z homebuyers or want to be more prepared for them as they make their way into the market, there are a number of ways to do that.

Lead With Education

Provide clear, jargon-free explanations of the homebuying process. Offer first-time buyer seminars (virtual or in person), downloadable or online guides, and FAQs. Position yourself as a trusted educator, not just a salesperson, so Gen Z homebuyers will come to you for information.

Embrace Technology

Meet Gen Z on their terms when it comes to interaction, including using text or video calling instead of email, offering video updates or Zoom check-ins, and using e-signatures and digital platforms. 

Other ways to engage with this group of buyers include maintaining a mobile-friendly website and sharing listings and insights on Instagram Reels or TikTok. Gen Z may look elsewhere if your processes feel outdated, and you could lose out on significant sales.

Highlight Affordability and Assistance

Make sure you're well-versed in local and federal first-time homebuyer programs. Be proactive in discussing budget-friendly options and creative financing solutions, and help Gen Z clients feel empowered, not overwhelmed, by the financial aspects of buying a home.

Many Gen Z buyers also may have concerns over buying a home now when interest rates are high. One tip for addressing these type of prospective buyers is to talk through future refinance options that may be available if/when interest rates decline. A prospective Gen Z buyer may be more open to buying a home now with the knowledge that they may be able to refinance their mortgage loan into a lower rate in the future.[9]

You may also want to share that many lenders offer down payment and closing cost assistance to eligible first-time home buyers, which can help make the costs of buying a home more affordable.

Be Transparent and Authentic

Be honest about pros and cons, offer data to back up your claims, and encourage questions. Show that you care more about their needs than making a sale, and they may be more likely to stick with you.

Focus on Values and Lifestyle

Gen Z will be looking for a home, but also a lifestyle, so make sure to highlight features such as a home office for remote work, reduced carbon footprint, or community connections. Buyers want to see that their values are reflected where they live.

Build Long-Term Relationships

Even though Gen Z buyers may start with modest homes, they have long-term potential as repeat clients and referral sources. If you offer post-purchase support, stay in touch via social media, and check in periodically, you may nurture lasting connections and gain additional clients.

Share the Value of Building Home Equity

For Gen Z buyers who are currently renting, this may be an opportunity to discuss the value of building home equity as a homeowner vs. paying money each month in rent (that will not help provide future financial stability). Every month, a Gen Z buyer may be paying thousands in rental payments to their landlord. 

When they purchase a home, a portion of each mortgage payment will go toward building equity. They may be able to convert that equity into funds that can be used for financial goals, such as debt consolidation, home improvements, or financing other large purchases. 

Discussing the pros and cons of renting versus home ownership may be an essential factor that the Gen Z buyer has not yet considered, so it's important to explore the potential value that building home equity may offer through products like a cash-out refinance or a HELOC.    

Buyer Psychology Is Vital for Gen Z Sales

Generation Z is reshaping the real estate landscape with its unique values, financial realities, and digital behaviors. For real estate agents, adapting to these shifts is essential. When you understand Gen Z's buyer psychology and embrace technology, you can meet them where they are and build meaningful relationships.[10]

At PNC Bank, we support real estate agents as they learn more about client needs and build strong futures. Contact us today and let us serve your real estate agent banking needs.