Key facts
- 78% of Gen Z respondents would cut lifestyle spending to afford a home.
- 74% of Gen Z buyers would consider a smaller property.
- 65% of all respondents would seek a smaller mortgage to improve affordability.
- UK buyers were least willing to purchase a smaller home (42%) or cut lifestyle spending (59%).
- Canadian respondents were most willing to purchase a smaller home (68%).
- Australians and New Zealanders showed the highest willingness to reduce lifestyle spending (75%).
Prospective homebuyers across several countries are demonstrating a greater willingness to make financial and lifestyle adjustments to achieve homeownership, particularly among younger generations. New research from Cotality's Consumer Sentiment Report indicates that Gen Z and Millennial buyers are more prepared than their older counterparts to reduce discretionary spending and compromise on property size.
The report, which surveyed consumers in the U.S., Canada, the UK, Australia, and New Zealand, found that 78% of Gen Z respondents and 77% of Millennials would cut lifestyle spending to afford a home. This contrasts with 69% of Gen X and 50% of Baby Boomers. Gen Z also led in willingness to consider smaller properties, with 74% open to it, compared to 64% of Millennials, 57% of Gen X, and 43% of Baby Boomers.
Selma Hepp, chief economist at Cotality, noted that Gen Z buyers, having grown up with elevated housing costs, have different expectations and are more flexible in their approach to achieving homeownership sooner. Across all respondents, 65% indicated a willingness to accept a smaller mortgage, with more than half considering a less expensive property or refinancing into a smaller loan. Approximately 69% have already reduced or plan to reduce discretionary spending.
Market-specific variations exist, with UK buyers showing the least willingness to compromise on home size, mortgage amount, or lifestyle spending. Conversely, Canadian respondents were most open to smaller homes, while Australians and New Zealanders were most willing to cut lifestyle spending. The U.S. market generally aligned with global averages.