What the Rise of Generation Z Means for Home Builders
Generational forecasting is the process of lumping age demographics into cohorts so as to understand how large scale social environments affect varying generations. These groups typically make up about 15 year spans, with Millennials being ages 20-35 roughly. While businesses have been shocked at the drastic deviation of Millennials from the past standard, Generation Z, ages 5-20, is even worse and is already the largest generational group by the numbers.
As these youngsters are becoming a more substantial subsection of the consumer market and are nearing the age of entering the home-buyers’ market, it is important for home builders and designers to understand how this new cohort will affect their industry.
Delayed Home Buying
Over the past few decades there has been an enormous push for attaining higher education. Combining this with faster-than-inflation growth in college tuitions, which has outpaced rises in salaries, means college graduates have more debt than ever. College graduates have about twice as much debt as previous generations.
This trend is continuing to get worse and worse. More government-backed student loans mean that Gen Z will have a harder time getting mortgages and purchasing homes. Immediately we can see rental properties and co-living environments will be more favorable.
Beyond debt situations, Millennials are getting married and having children later than before and indicators point to Generation Z keeping up this trend, if not getting more extreme. Due to the large opportunity costs of owning versus renting, being young, single, and not having a family furthers the likelihood Generation Z will opt into renting for longer than any generation.
On a more nuanced level, the design desires of Generation Z are more unusual than ever. Generation Z’s most defining feature is that they were born around the turn of the century and so by the time they could walk, were learning how to use the Internet, social media, and technology. They are the first generation of technology natives and have been influenced in every way by the startup boom and social media.
Companies such as Nest and Keurig display the high technology standards Gen Z has for all of their products and tasks. The Internet of Things movement in startups encapsulates this premise by wanting to digitize everything. No longer are manual light switches good enough. Since Gen Z has only ever known technology, they want it in everything they know, including their homes.
Sleek Original Aesthetic
The growth of startup culture has impacted the thoughts of aesthetic and design with Generation Z more than any other factor. Logos and advertisements for megalithic institutions such as Facebook, Instagram, and even Tinder all utilize a similar mathematical, uniform, and clean design preference. This preference can now be seen in most of Generation Z and their tastes for other goods, including housing. Sleek, clean, and modern are some of the words Gen Z attributed most to their design desires.
Even beyond this, there is an incredible importance on having a unique voice with aesthetic. Growing up with social media and witnessing the rise of social media influencers, the "hot" and "not" distinction is entirely determined by originality. Whether an influencer makes new, edgy content, designs innovative clothing, and overall has a unique voice for what they do is one of the most important attributes Gen Z looks for.
In home design, finding a new self-expression, which utilizes a fresh and sleek appeal is the key to winning over Gen Z.
Understanding the oncoming generation, what they look for in life and what factors have contributed to their situation is the key for long term success and creating quality products, which resonate with them and their ideologies. Gen Z is unlike any generation before so continuing in the same old fashion will only lead to failure.