For Generation Z, Diversity Is a Mission

Written by David Mele – President, Posted On Tuesday, 10 December 2019 05:25

Though the oldest members of Generation Z are younger than 25, many are already making plans to buy their first homes. Recent research revealed that almost 87% of this generation plans to buy their first home before they reach age 35, which is supported by a Bank of America study that found 59% of prospective Gen Z homebuyers want to buy within the next five years. 

Recognizing their growing interest in homeownership, wanted to learn more about what this largest cohort of upcoming home buyers wanted in its home buying experience. The result? A majority of those surveyed stated that diversity was an important criteria for their neighborhood.

This shouldn’t come as a shock; in every American generation since World War II, the proportion of non-whites to whites has increased, beginning with 18% of Baby Boomers born in the post-World War II years to the newest generation of rising adults, Generation Z (currently 18 to 24 years old). The trend of falling white births and rising non-white birthrates will reach a point within the next three decades where there will be no majority race in America. 

America will become majority nonwhite by 2050.

Source: Diversity Explosion: How Racial Demographics are Remaking America.

Gen Z is more racially and ethnically diverse than its predecessors, and will also make important lifestyle decisions based on their desire to live in a diverse society, according to our study. The research suggests that Generation Z’s attitudes towards living in diverse communities reflect a notable change from the views of their grandparents, the Baby Boomers.

America’s new diversity—poised to invigorate the country at a time when other developed nations are facing advanced aging and population loss—can be celebrated, as it will infuse the aging American labor force with sustained energy.

But, are members of Generation Z up to this challenge? Are they sufficiently committed to their ideals to pick racially diverse communities to raise their families? Are they, in fact, a highly diverse, globally-connected generation that will invigorate the country?

To glean more insights into Generation Z’s commitment to diversity, conducted a follow-up survey to dig deeper into how it fits into their future plans for homeownership. 

With maturity, Generation Z seeks more diversity

We found that Generation Zers’ experiences with diversity differ by age and race. Only one-third (33%) of Gen Zers who participated in our survey said that they grew up in neighborhoods that were racially and ethnically diverse. 

Whites and minorities grew up in neighborhoods that differed in terms of racial diversity. Among white members of Generation Z, our survey found that only one in four (25%) grew up in diverse neighborhoods. On the other hand, more than half of Hispanics (58%), and nearly half of African Americans and Asian Americans (both 48%) were more likely than whites to grow up in diverse neighborhoods.

Fast-forward to present day, nearly half of our sample of Generation Z adults indicated they live in diverse neighborhoods. White respondents living in diverse neighborhoods increased by 18%, while the percentages of minority groups living in diverse neighborhoods also increased, albeit by smaller percentages (Hispanics by 8%, African Americans by 13% and Asian Americans 17%). 

Diversity and Generation Z Percentages







Asian Americans

Grew up in diversity






Now live in diversity






Pay more for diversity?








Housing markets and the price of diversity

Though diversity may suggest affordability, in today’s real estate markets, the opposite is often the case. The top ten cities in the nation with the most diverse populations are also among the nation’s most expensive real estate markets. Three of the largest metropolitan areas—New York, Los Angeles, and San Francisco—house roughly half of the racially diverse and mixed-income population in the nation.

Notably, these are also three of the most expensive housing markets in the nation. Though their diverse neighborhoods qualify as mixed-income within their metros, their home prices are among the highest in the nation, and their inventories of affordable starter homes are among the lowest. Prices and inventories in the top 20 racially diverse metros also rank among the least affordable.

In light of their ages and today’s real estate economy, Generation Z buyers are very cost-conscious, and few are willing to pay a premium to buy in a diverse neighborhood. Our survey found that only 9% would be willing to pay a premium to actually buy in a diverse community.

Celebrating America's new diversity

The data supports research by the Pew Research Center, which found that most Americans believe a U.S. population of diverse races and ethnicities is a good thing for the nation. Members of Generation Z may have different paths to reach a consensus that diverse neighborhoods are good for America, but collectively they believe exposure to diverse cultures is healthy for themselves and their families.

Time will tell how Generation Z’s commitment to diversity and inclusion will shape communities and affect the real estate industry. As we continue our research into these young homebuyers, we do so with confidence that they will seek and create diversity in neighborhoods across the country.

4 Ibid,. See Table 4. Pp 15

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