A new report recently released by ServiceLink revealed that Gen Z remains eager and ready to buy a home this year. But high interest rates and home prices could deter them from crossing the finish line as their tolerance is waning, ServiceLink announced in a press release.

The annual survey analyzes generational trends among recent and prospective homebuyers, revealing their sentiment about the current housing market and their intentions to purchase, refinance or leverage home equity this year.

Now in its fifth year, the 2025 ServiceLink State of Homebuying Report (SOHBR) features insights from homeowners who either purchased a home or tried to purchase a home within the past four years and focuses on yearly trends that provide valuable insights for lenders, servicers, investors and real estate agents alike.

This year, buyers and would-be buyers showed a growing interest in technology, adding more space to their home and a desire for even greater transparency.

“These findings show that there is still a strong appetite for homeownership, particularly among the youngest generation, despite the ups and downs of today’s market,” Dave Steinmetz, president, origination services, said in the release. “Today’s buyers need to be armed with information, while demonstrating patience and flexibility, in order to achieve their dream of homeownership. For lenders, this provides an opportunity to tap into technology and increase offerings that buyers indicate they want to see. Lenders also should focus on education and increasing transparency to meet the current needs of today’s buyers.”

Gen Z remains ready to buy a home, but also willing to walk away, while key findings of the report include:

• A showing of 67 percent of Gen Z respondents said they plan to purchase a home this year compared to 51 percent of millennials, 49 percent of Gen X and 22 percent of baby boomers.
• Overall, 47 percent of those surveyed said they plan to consider purchasing a home in 2025.
• High home prices and interest rates could hold buyers back from going through with a purchase, while 43 percent of respondents said they considered buying a home in 2024 but decided against it for those reasons.
• Gen Z led all respondents in their decision to walk away from the process, as 58 percent said they abandoned the homebuying process in 2024 and 38 percent said they were unsuccessful in their attempt to purchase in the last four years.

Additionally, the survey showed a favorable outlook, but tolerance for high interest rates is waning.

A showing of 41 percent of all respondents said that they believe conditions are favorable for buying a home this year. Gen Z led the way with 52 percent having a favorable outlook on the market, while only 23 percent of baby boomers felt the same.

Also, 69 percent of all respondents said they are happy with their current mortgage rate.

For those interested in purchasing this year, their tolerance for high rates is waning. Gen Z respondents indicated that they have an average 5.1 percent mortgage rate yet would consider going as high as 5.8 percent. That number is down from a year ago, when Gen Z respondents were willing to go as high as 6.3 percent.

Millennials are also pulling back their tolerance this year, with the highest rate they would consider set at 5.5 percent, down from 6.2 percent in 2024.

Millennials are slowly stepping back, while Gen X is making a return

Millennials, who just two years ago were the most eager among all generations to purchase a home, are slowly pulling back their desire. 51 percent of millennials still plan to buy in 2025, down from 59 percent last year and 61 percent two years ago.

Only 46 percent of millennials said conditions are favorable to buy in 2025, down from 60 percent in 2023.

Gen X, on the other hand, is showing a renewed interest in buying a home in 2025. This year, 49 percent of Gen X respondents said they plan to buy, up from 45 percent in 2024, 25 percent in 2023 and 12 percent in 2022.

Gen X is also the most influenced by technology, with 82 percent saying they would be more likely to work with a lender that offers appraisal or closing appointment scheduling from a phone or tablet that allows them to select the exact date and time they desire.

Additionally, 77 percent of Gen X respondents said they would select a lender who offered virtual closings.

Buyers know what they want: Space

For those who plan a home purchase in the next year, 60 percent of respondents said they’re looking for a home with more space, a 17 percent surge from a year ago, while 39 percent of respondents said they would like to see more room between homes.

As far as the biggest deal breaker in buying a home, 51 percent of respondents said that would be whether or not the size of the home is too small. Other top deal breakers include higher taxes (48 percent), lack of privacy/homes too close together (43 percent) and lack of outdoor space (33 percent).

Gen Z leads all generations in their desire for a larger home with more space at 66 percent, followed closely by millennials at 64 percent.

Lenders take note: Technology benefits are widespread  with 59 percent of respondents said the biggest benefits of mortgage technology offerings is the convenience and ease of use it provides, while 51 percent said they like that it saves them time and 45 percent enjoy the flexibility that it offers to make progress on their own schedule.

eSigning technology continues to surge with 62 percent of all respondents who purchased a home in the last four years saying they utilized digital document signing, up from 48 percent who said they did the same two years ago, while baby boomers leveraged eSigning the most at 70 percent compared to 42 percent of Gen Z respondents, and 35 percent of all survey respondents who purchased a home in the last four years said they scheduled their appraisal or closing digitally, with millennials leading the way at 39 percent.

Equity is growing, and so is the desire to refinance, with 39 percent of all respondents saying they have at least $100,000 in home equity, up from 34 percent in 2023. One in four respondents said they plan to take out a home equity loan this year, down slightly from 28 percent in 2024, with 10 percent of respondents saying they don’t know enough about home equity loans to consider them.

Many respondents have hope that mortgage rates might drop this year, allowing buyers to secure a better rate, with 60 percent of respondents saying they are either “likely” or “somewhat likely” to refinance this year in an attempt to get a better rate. That is up slightly from 57 percent in 2024.