Young homebuyers are betting on refinancing to be able to afford their homes, gambling their financial futures on possible changes down the road.
A new survey of 1,000 recent U.S. homebuyers from data verification platform Truework revealed that 64% of Gen Z and 65% of Millennial buyers believe refinancing to be important to their financial health.
Though more than half of all recent buyers cited refinancing as important, only 32% of Baby Boomers reported the same strong belief.
Millennials and Zoomers stressed out more during the buying process than their older counterparts, reporting higher levels of pessimism about their financial futures and less certainty about the terms of their mortgages.
Nearly 20% of Gen Z buyers felt financially insecure when purchasing their homes, more than double the percentage of Boomer buyers and slightly higher than Millennials and Gen X.
“These findings reveal a generation of homebuyers who are taking significant financial risks in today’s market,” said Ethan Winchell, Co-founder and President of Truework.
“While homeownership remains a priority, younger buyers are betting their financial future on the hope that interest rates will drop significantly enough to make refinancing viable.”
Truework also asked respondents why they decided to buy in the first place, given their uneasiness.
For all generations, regions, and marital statuses, “Necessity for my life and/or family” and “Prices don’t seem to be dropping and might actually go up” were the biggest drivers.
Young Americans want to achieve homeownership as much as anyone, but these generations face huge hurdles to first-time buying. While 33% of 27-year-olds own a home today, 40% of Baby Boomers did at the same age.
Average wages and housing costs are increasing at different rates than their parents’ early years, meaning potential buyers need to save more while receiving essentially the same paycheck as they did a decade ago.
