"Generation Rent"


Today, the millennial and Gen Z generations make up the largest group of potential homebuyers, and many of them are currently seeking to be first-time buyers. As inflation rises and the cost of rent increases quickly, many members of these two groups are reconsidering their living arrangements. According to a study conducted by Housing Wire, 45% of members of these generations are currently renting, and 51% want to buy a home to get away from the rising cost of the rent. More and more millennials and Gen Zs are seeking lending options as their desire to transition from renter to buyer increases. The same study also found that 61% of millennials and Gen Zs plan to apply for a mortgage this year. However, these groups are approaching lending differently than preceding generations.

Buying Barriers

The main concern future buyers from the millennial and Gen Z generations have is the impact that personal finances will have on their likelihood of securing a mortgage. Members fear that insufficient savings, increasing debt, and low credit scores will contribute to poor results when applying for a loan. According to 2022 Maxwell Borrower Survey data, an insufficient down payment is the highest barrier millennials and Gen Z believe they face, sitting at 45.75%; a high debt-to-income ratio is another concern, at 45.15%. Due to concerns about personal finances, members find the mortgage process to be overly expensive, and 25% of buyers do not feel confident that they will secure a loan. In addition to financial concerns and increasing mortgage rates providing challenges for millennials and Gen Zs, these potential home buyers also face the problem of lack of knowledge on the subject of lending. However, 75% of millennials and Gen Zs still believe they will eventually secure a mortgage despite their difficulties.

personal finances

Desired Lenders

As mentioned above, millennials and Gen Z homebuyers feel they lack the knowledge necessary to successfully secure a home loan. As a result, when these members are seeking assistance throughout the mortgage process, they prefer a personalized experience. According to the Maxwell Borrower Survey, over 78% of potential homebuyers from these generations stated that personal support is important to them during the mortgage process. To increase the confidence that millennial and Gen Z homebuyers have in securing a loan, loan officers must build members’ trust by providing support and resources for education. Studies have also found that these generations prefer to shop online for “the right fit” for their personal needs, and do not necessarily care about big names in lending. When asked about deciding factors in choosing a lender, millennial and Gen Z respondents placed the lowest rates and lowest fees at the top of the list, with personal guidance, speed of the process, and a sense of trust following closely. To determine what type of lender would best suit these needs, 28% of potential borrowers believed they would go with a local community lender, while only 15% wanted to opt for an online lender.


The housing and lending markets are now seeing the exciting transition of tired renters to eager homeowners. Though millennials and Gen Zs may face challenges when starting the mortgage process, it is pertinent to remember that these generations have strong buying potential, as they now make up the largest group of potential homebuyers. To match the needs of these groups, lenders are shifting their approaches to the mortgage process by providing personal support and education to enhance their lending experience.

millennials and generation z

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