In April 2019, Homes.com conducted a survey of over 1,000 members of Generation Z and discovered that 58% of them preferred to live in diverse neighborhoods, compared to only 12% who preferred a homogenous community. This made sense, as they are the most racially and ethnically diverse generation in recorded history. But, it also inspired many questions: Why is Generation Z so committed to diversity? How will this commitment shape the real estate industry? How will this generation shape America’s neighborhoods?
In part two of our Generation Z series, we share the results of our newest survey of over 1,300 Gen Zers who are planning for future homeownership, and their attitudes toward diversity and home amenities.
Future Generation Z Homebuyers View Diversity as a Social Goal
Nearly half of future Generation Z homebuyers who plan to buy a home in racially and ethnically diverse neighborhoods are motivated by a belief that diversity is a positive force in society. These opinions are shared almost equally by white, Hispanic, African-American and Asian respondents, suggesting an emerging post-racial mentality.
When asked to select the two major reasons for preferring to purchase a home in a heterogeneous community, 44% of those who expressed that preference answered that diversity is “good for America” while almost 36% said they were interested in being exposed to other cultures. Just 13% of respondents cited either their own racial or ethnic identity or that of a spouse or partner as a factor in their choice.
Generation Z is Already Shifting to More Diverse Communities
Only 33% of Gen Z members grew up in diverse neighborhoods. Nearly 60% of white respondents grew up in homogeneous neighborhoods, while a majority of Hispanic, African-American and Middle Eastern or North African respondents lived in diverse communities as children.
48% of respondents now live in communities with heterogeneous populations, reflecting shifting neighborhood demographics as well as Gen Z relocations during their college and post-college years. This trend will continue to accelerate as Gen Z overtakes millennials to dominate real estate markets.
Generation Z Bucks the Trend of Purchasing Condominiums as First Homes
Forty-six percent of Gen Z homebuyers prefer single-family homes over townhomes (7%), detached multi-family units (5%) and condominiums (4%). This is unusual for young first-time homebuyers, but it may change if single-family home prices continue to rise over the next few years before the first Gen Zers begin house hunting.
Eco-friendly Design and Smart Technology are Not Top Priorities
Outdoor entertainment space and open interior design topped the list of desired home features. Fifty-four percent of respondents want a backyard area with amenities like a patio and deck and 44% looking for rooms that flow into one another. Both factors surpassed traditional preferences such as a garage (40%) and hardwood floors (34%).
Surprisingly, eco-friendly design and smart home systems ranked last in feature preferences at 22% and 17%, respectively, despite increasing industry attention to both, rising environmental concerns, and the comfort level of younger people with technology.