Gen Z homebuyers turn to social media to win in competitive housing market
At 22, Vayna Jerabek is a Gen Z real estate agent who offers housing tips on TikTok. And her peers are gobbling it up.
She's already amassed 640,000 followers and one video on house-hacking — where you buy a place and rent out rooms to offset the high mortgage payment — has garnered 1.6 million likes. Others offer advice on down payments, finding off-market homes, and how to qualify for a bigger house.
“My personal mission is to empower my generation so that they know that real estate is a serious vehicle to creating wealth,” Jerabek said. “It's just such a big driver of your future prosperity.”
The popularity of her videos reflects how Gen Zers, those born between 1996 and 2012, are tapping into social media to navigate an unaffordable housing market and they are winning the game by learning tips and making lifestyle changes.
Thirty percent of Gen Zs who were 25 owned a house in 2022, according to data published by Redfin. That is higher than the rate for both millennials (28%) and Gen X (27%) when they were the same age. Boomers slightly outpaced the youngest generation with 32% homeownership rate when they were 25.
"[Gen Zers] are not like your average rookie buyer," Jon Byram, a Redfin real estate agent based in Northern Virginia, said. "They also do have a very good grasp on what the house is going to do, what they are getting for this home price, and the [resale value] down the road."
For instance, Jerabek is taking her advice on house hacking. She closed her home on Friday and is moving out of her parents' house for the first time. She plans to rent out the extra rooms for additional income.
"It's a three-bedroom and I'm going to Airbnb two of the rooms," Jerabeck said. "The mortgage payment is $4,000. And I want a low payment because then I can use my money to do other things."
‘Done a lot of research’
Getting a leg up is crucial in this housing environment. Buyers face a trifecta of challenges: high prices, little inventory, and elevated mortgage rates. This generation is proving to be nimble with social media at their fingertips. They are fast to learn and even quicker to react when it comes to the housing market.
"They have done a lot of research. And a lot of times they are very familiar with the terms that we use, like what's an EMD and what's an escalation clause," Byram said. "When the market was really competitive, most of my wins were younger generation people who were willing to do what it took."
(For those who don’t know: The EMD, or earnest money deposit, is a buyer’s good-faith deposit for the seller, which can be reclaimed if issues occur during the buying process and the deal is terminated. An escalation clause is an addendum in a home offer contract stating the buyer is willing to raise their bid price if the seller receives a higher competing offer.)
A search on Jerabek's TikTok shows her discussing topics like setting up a home-buying plan and utilizing an FHA owner-occupied home loan. Viewers often chime in with their own tips in the comment section, sharing advice like how to build credit with credit cards and ways to select qualified tenants.
"They don't teach this stuff in school. Unless your parents are teaching it to you, you don't know," Jerabek said. "I get messages every day [that say] thank you for inspiring me, I now bought my first house because of you… [or] my parents never taught me this."
‘We want to maximize our income’
These young homebuyers are also willing to make sacrifices for homeownership.
"We want to maximize our income by lowering our expenses," Jerabek said. "We are not very into consumerism."
A recent Zillow survey found that 26% of Gen Zers believe they would need to give up all spending on clothing, dining, and entertainment to afford a home, while 27% would need a second or third job.
Many Gen Zers have also chosen to remain with mom and dad to save on rent and use that money toward a future down payment. Census data from 2021 showed that almost three-quarters of young men and more than two-thirds of young women are living with parents or relatives.
"I'm probably not going to find or move out to my own apartment, at least in the near future, because I want to start saving up for my own house one day," said Ashwin Musipatla, a 23-year-old Rutgers college graduate who now works as a raw material buyer at a chemical company in New Jersey. The trade-off, he acknowledged, is giving up a sense of more independence and personal space.
Jerabek has also been living with her parents to avoid paying rent.
"So I live with my parents right now. This is my first time moving out," she said. "Why would I move out and go pay rent when I could save for a down payment and buy a house later?"
TiKTok agrees. The hashtag #livingwithparents has 129 million views and many creators share how they are saving tens of thousands of dollars annually.
"Why not take advantage of it?” Byram said. “Especially if you're building towards something.”
Rebecca is a reporter for Yahoo Finance and previously worked as an investment tax certified public accountant (CPA).
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