HousingWireHousingWire
Now in its fifth year, the 2025 ServiceLink State of Homebuying Report (SOHBR), released today, revealed that while Gen Z remains eager and ready to buy a home this year, high mortgage rates and home prices could deter them from crossing the finish line.
Out of Gen Z respondents, 67% said they plan to purchase a home this year compared to 51% of millennials, 49% of Gen X and 22% of baby boomers.
But Gen Z also led all respondents in their willingness to walk away under difficult buying conditions, as 58% said they abandoned the home-buying process in 2024, and 38% said they were unsuccessful in their attempt to purchase in the last four years.
ServiceLink’s annual survey analyzes generational trends among recent and prospective homebuyers, tracking housing market sentiment and their intentions to purchase, refinance or leverage home equity this year.
“These findings show that there is still a strong appetite for homeownership, particularly among the youngest generation, despite the ups and downs of today’s market,” said Dave Steinmetz, president, origination services at ServiceLink. “Today’s buyers need to be armed with information, while demonstrating patience and flexibility, [to] achieve their dream of homeownership. For lenders, this provides an opportunity to tap into technology and increase offerings that buyers indicate they want to see. Lenders also should focus on education and increasing transparency to meet the current needs of today’s buyers.”
Despite Gen Z’s waning tolerance for home-buying challenges, 41% of all respondents said that they believe conditions are favorable for buying a home this year. Gen Z led the way with 52% having a favorable outlook on the market, while only 23% of baby boomers felt the same.
Buyers’ willingness to buy with high mortgage rates is fading this year, ServiceLink found. Gen Z respondents reported having an average mortgage rate of 5.1% and said they would consider going as high as 5.8% — down from 6.3% last year.
Millennials are also becoming less open to higher rates, with their ceiling dropping to 5.5% from 6.2% in 2024. However, millennials are pulling back their desires to purchase a home, with 51% of millennials still planning to buy in 2025, down from 2024’s 59% and 2023’s 61%. Only 46% of millennials said conditions are favorable to buy in 2025, a pessimistic slip from 60% in 2023.
However, Gen X survey responses indicate a renewed interest in buying a home in 2025. This year, 49% of Gen X respondents said they plan to buy, up from 45% in 2024, 25% in 2023 and 12% in 2022.
Space and technology are hot commodities
Of the pool of respondents who plan on purchasing a home within the next year, 60% said they’re looking for a home with more space, a 17% uptick from a year ago, while 39% of respondents said they would like to see more physical space between homes.
Over half (51%) of respondents also cited small home size as a deal breaker. Other top deal breakers include higher taxes (48%), lack of privacy/homes too close together (43%) and lack of outdoor space (33%).
The respondents also have expectations of their lenders to be technologically savvy as they navigate their home purchase. The biggest benefits of mortgage technology, according to 59% of respondents, is the convenience and ease of use it provides, while 51% said they like that it saves them time and 45% enjoy the flexibility that it offers to make progress on their own schedule.
Many respondents (62%) cited eSigning technology as something they utilized during the home process. Baby boomers leveraged eSigning the most at 70% compared to 42% of Gen Z respondents.
