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2025 ServiceLink Homebuying Report: What Gen Z Wants

The 2025 ServiceLink State of Homebuying Report has unveiled critical insights pertaining to the latest trends among homebuyers, especially focusing on Generation Z. As the youngest cohort of homebuyers, Gen Z shows a robust interest in securing their first homes this year, despite facing significant economic challenges such as soaring interest rates and elevated home prices.

A survey conducted with over 1,500 participants aims to shed light on perceptions surrounding the current housing and mortgage markets. It highlights the sentiment of potential buyers regarding their intentions to purchase, refinance, or utilize home equity within the year.

Homebuying Sentiments

According to the report, an impressive 67% of Gen Z respondents plan to buy a home in 2025. In comparison, only 51% of millennials, 49% of Gen X, and just 22% of baby boomers expressed similar intentions, demonstrating a significant appetite for homeownership among the younger demographic. Overall, 47% of all surveyed individuals indicated their intention to consider purchasing a home in the coming year.

However, the high cost of housing remains a crucial roadblock. A startling 43% of respondents mentioned that they had considered buying a home in the previous year but ultimately opted out due to these financial constraints. Notably, Gen Z leads this trend with 58% of them reporting they walked away from the homebuying process in 2024, while 38% were unsuccessful in previous attempts to purchase.

Market Outlook

Despite challenges, there's a sliver of optimism. About 41% of all respondents consider current conditions favorable for home buying, with Gen Z at the forefront, where 52% have a positive outlook. Contrariwise, only 23% of baby boomers share this sentiment. Among potential buyers, their tolerance for high-interest rates is diminishing. On average, Gen Z is currently comfortable with a mortgage rate of 5.1%, but they would only consider going up to 5.8%—a noticeable decrease from their previous willingness of 6.3% last year. Millennials are also tightening their belts, now willing to consider rates up to 5.5%, down from 6.2% in 2024.

Shifts in Purchasing Intent

Millennials, who have historically been a dominant demographic in the housing market, are starting to retreat. Only 51% now plan to purchase a home this year, which reflects a decline from 59% in 2024. Meanwhile, Gen X appears to be making a comeback, with 49% indicating plans to buy in 2025, a noticeable increase from just 12% in 2022.

In terms of technology influence, Gen X stands out, as 82% expressed a stronger inclination to collaborate with lenders offering tech-enabled services for appraisals and closings via mobile devices. Virtual closings have the same appeal for 77% of Gen X respondents.

Home Features in Demand

A significant shift in preferences has been observed regarding desired home features. A substantial 60% of potential buyers are seeking homes with more space, a 17% rise from the previous year. Among the deal-breakers reported, 51% stated that the size being too small would discourage them from making a purchase. Other factors like higher taxes (48%) and lack of privacy (43%) are also high on their list of concerns. Interestingly, Gen Z tops the list of those wanting larger homes, with 66% prioritizing space—followed closely by millennials at 64%.

The Role of Technology

The report highlights a growing reliance on technology in the homebuying process. A remarkable 59% of respondents acknowledged that the convenience and ease of use offered by mortgage technology enhance their buying experience. Increased use of digital services is evident, with 62% of homebuyers having utilized eSigning technology, up from 48% just two years prior. Moreover, 35% scheduled appraisals or closings digitally, with millennials leading the charge at 39%.

As equity continues to grow, the interest in refinancing also increases, with 60% of respondents indicating they are likely to pursue refinancing for a better rate, up from 57% in 2024.

Conclusion

In summary, the 2025 ServiceLink Report underscores a compelling landscape in the homebuying sector, particularly for Gen Z. It highlights the urgent need for lenders and real estate professionals to adapt and offer targeted support and resources that align with the evolving demands of today's homebuyers. As high costs loom large, fostering transparency and technology integration could be essential for helping potential homeowners achieve their dreams, providing them with the tools to navigate this challenging market effectively.