Millennial Power Shift
When it comes to generational influence, there’s a massive transition underway—with millennials and Gen Z calling the shots.
Prepare for a changing of the guard. Baby boomers are currently the wealthiest and most influential generation. Weighing in at 70.2 million strong, boomers hold 53 percent of all U.S. household wealth and comprise a majority of S&P 500 CEOs, chief justices, and state governors. They have worked longer than the generations before them, but they are now retiring in droves.
Generation Xers are poised to inherit the boomers’ wealth and leadership positions, but an uncontested ascension isn’t guaranteed. Xers do presently have the highest level of cultural influence, dominating top positions at large news corporations and media outlets, and they’re at the peak of their careers. But millennials and some enterprising Generation Zs are in hot pursuit.
As millennials and Gen Zs emerge, they’re changing the rules of engagement. In the face of divisive politics, existential environmental threats, global pandemics, and social justice challenges, younger generations are calling out a broken status quo, demanding an urgent reckoning, bold leadership, and a radically better future.
Born from crisis, the passion, purpose, optimism, and outrage of these generations is creating endemic structural change. The generations that grew up with active shooter drills in schools, fake news, and catastrophic climate events have had enough.
Exhausted with how negative and divided our country has become, these younger individuals are flipping the script on the current national dialogue.
And they’re motivated to act: According to Green Builder Media’s COGNITION Smart Data, more than 80 percent of these budding leaders believe that they can—and must—step up to make a difference in the world. Will their undaunted optimism yield a radical reimagination of our culture?
Each generation is shaped by its own unique historical context, including events, wars, recessions, elections, social movements and cultural experiences, creating a shared perspective about the world.
As younger generations move into positions of power, they are influencing society, shaping it to conform to their world view, which makes it particularly important to understand the nuanced purchase drivers, penchants, and behavioral patterns of millennials and Zs so that we can know what to expect for the future.
While the two generations have similarities, they’re actually quite different, with divergent preferences and expectations based on the events that took place during their formative years.
Millennials: The Driving Force
Millennials (born between 1982 and 2000) have been top of mind for builders, developers, and manufacturers alike for years, and with good reason: 88 million strong, this group boasts a total spending power of more than $2.5 trillion.
Values based and mission driven, millennials place purpose over paycheck, care deeply about the environment, and incorporate sustainability into their decision making.
According to a recent survey conducted by COGNITION Smart Data, Green Builder Media’s market intelligence division, 87 percent of millennial respondents are worried about climate change, 93 percent believe that companies should take a stand on environmental issues, and 78 percent prefer purchasing products from sustainable brands.
Fifty-six percent of COGNITION survey respondents believe that humanity is doomed due to climate change. In fact, these millennials claim that failure to mitigate and adapt to climate change is their top global risk of highest concern, more so than economic or social instability, COVID, terrorism, or gun violence.
Out of all the generations, millennials report the highest level of interest in resiliency, perhaps because they’re directly experiencing negative impacts from climate-based events like superstorms, tornadoes, wildfires, flooding, and extreme heat.
Gen Zs on the Rise
Generally speaking, Gen Zs are individuals born between 2001 and 2019. Weighing in at approximately 78 million, they command a combined spending power of nearly $360 billion—a number that will grow substantially over time as their net worth increases. The oldest Gen Zs are graduating college and starting to think about buying homes.
Millennials and Gen Zs resemble each other in certain respects—for example, both generations value work-life balance and remote working. However, the events that defined their childhoods resulted in divergent global outlooks.
Millennials were raised during a time of relative economic growth and prosperity, whereas Gen Zs’ childhoods were marked by two crippling recessions and a global pandemic. As a result, Zs tend to be more debt-adverse and budget-conscious than their older peers.
Perhaps because of the general instability of their childhood years, Gen Zs indicate that they experience stress and anxiety on a daily basis. They believe that mental health should be openly addressed in the workplace, and they’re looking for jobs that offer benefits like mental health days, therapy, and access to medication.
Gen Zs are the most diverse generation in American history. While millennials embrace and celebrate diversity, equality is a guiding principle for many Zs. Expect this generation to become even more vocal about their passions and concerns over the coming years as they continue to mature. /p>
Gen Z is considered to be a highly sensible generation. They value realism, safety and security, and solving real problems.
When it comes to purchase decisions, Gen Zs—who never knew a world without the Internet—rely heavily on YouTube. According to a survey conducted by YPulse, 64 percent of Gen Zs access the majority of their media content on YouTube—it’s the first place they go to get information about something they don’t know (whereas millennials tend to go to Google).
Additionally, YPulse found that Zs are more likely to follow the purchase recommendations of social media influencers than millennials (60 percent versus 42 percent).
Another essential difference between the two generations: Millennials grew up spending time in-person with their friends, whereas Zs have had more remote engagement due to the forced separation caused by Covid. Zs are inclined to rely on remote learning, gaming, social media, and the metaverse as communication and socialization tools. Because of this, Zs are more inclined to spend time and work alone than their millennial counterparts.
Gen Zs and Housing
The American Dream is alive and well in line with the Gen Z generation. COGNITION data reveals that 86 percent already have set their sights on homeownership. And, with the recognition that paying higher prices for a home is a better prospect than paying ever-increasing rents, these individuals indicate that they want to purchase homes quickly.
According to Rocket Homes Research, nearly 45 percent of Gen Zs want to purchase a home within a speedy 5 years. Older Gen Zs who are purchasing homes are generally entering the market in small or mid-sized, affordable markets.
While long on desire, Gen Zs still face a rocky road in the home buying process. The biggest challenge that this generation is facing is unrealistic expectations about home prices: on average Gen Zs have an expectation that they’ll pay around $223,000 for a home, whereas the median national home price has reached a bloated $425,000.
As with general purchase drivers and behavioral patterns, millennials and Gen Zs have similarities and differences with respect to their housing preferences.
According to a recent survey conducted by COGNITION Smart Data, both audience segments incorporate sustainability into their purchasing decisions and report that Environmental, Corporate, and Governance (ESG) is the most influential factor when making decisions about purchasing products for their homes. Millennials indicated that the environmental elements of ESG were the most important to them, whereas the social aspect was most important to Zs, with diversity, equity, and inclusion ranking top on their list of social concerns.
Because of their budget-conscious nature, Zs are more likely to consider long-term value, not just upfront cost, when purchasing a home since they understand that a more energy-efficient home will be more affordable over time.
COGNITION data reflects that millennials care deeply about healthy homes—in fact, they’re the first generation to indicate that having a healthy home is now as important as location when making home buying decisions. With that said, the data shows that Gen Zs place an even greater value on healthy homes than millennials, and that Zs have a broader definition of what healthy home means.
While healthy homes used to be the purview mainly of indoor air quality (including mechanical systems like HVAC, ventilation fans, and energy recovery ventilators [ERVs] and non-toxic materials), the concept of a healthy home has expanded over the past two years to incorporate healthy cooking, sustainable lifestyle choices, and stress relief. Younger homeowners and buyers are rethinking their lifestyle choices, including habits, diets, and exercise regimens to keep their families psychically and emotionally healthy.
This translates into increased demand for home features like:
- Intimate spaces for calming activities like yoga and meditation
- Flex spaces to accommodate remote working and adult retreats
- Antimicrobial surfaces, self-cleaning toilets, and touchless products like faucets, bidets, and locks for enhanced sanitation
- Ergonomic furniture and workstations
While millennials generally prefer open floorplans with indoor and outdoor spaces that can be used for gathering with family and friends, Zs seem to prioritize sanctuary spaces, meditation rooms, private gardens, and places where they can find peace and solitude.
A healthy home isn’t the only thing that Zs prioritize—they are keenly interested in all-electric living. The recent COGNITION survey showed that 100 percent of Gen Z respondents wanted to live in an all-electric home (versus 61 percent of millennials) because they can reduce their environmental footprint, have a healthier home, and save money.
While millennials prioritize resiliency, smart home technology, and solar, Zs place more value on net zero energy, water, and carbon.
Another interesting reveal from the COGNITION survey: 100 percent of Zs want to live in a prefab home because they believe those units are healthier and have higher performance and better quality than conventional site-built homes.
The survey also revealed that the circular economy is top of mind for millennials and Gen Zs. When asked what they’re doing to protect the planet, the most common response among millennials was recycling, composting, and reusing products to give them a second life.
Zs were more focused on ride sharing, alternative transportation, and riding their bikes. Interestingly, Zs still want homes with garages, but not necessarily for their own vehicles—rather, they want to use the space for bike shops, offices, gathering areas, and other unconventional uses.
Demographic Lessons Learned
There are a few important implications for building professionals and manufacturers when considering this generation.
First, Gen Zs value individualism and independence. They have a strong sense of agency over their lives that comes from their deep-rooted values and attitudes.
Second, they value measured consumption. COVID- and inflation-related supply chain shortages, in conjunction with a mounting sense of urgency to solve climate change, has driven this generation to embrace nature-positive actions and decisions that blend affordability with sustainability.
Third, record-low levels of trust, a greater demand for transparency and accountability, and soaring fears around fake news and misinformation has aroused a sense of conscious consumerism within members of this generation.
Lead or Be Left Behind
At a time of profound challenges and new possibilities, Gen Zs are looking for transformative brand leadership and systemic change. They’re demanding shifting paradigms—not just shifting preferences.
To effectively reach these customers, companies need to navigate and embrace the context and contradictions inherent in today’s society, understanding the gap between brand promises and lived experiences.
Authentic leaders will take advantage of this moment to ask hard questions about transparency, accountability, and their company’s role in our urgent social and environmental challenges, and they’ll find a way to meet consumer demand for a transition from an outdated business model in which companies extract value by exploiting people and natural resources to a new paradigm whereby companies create value by enriching the lives and livelihoods of employees, communities, customers, partners, shareholders and the environment.
Perhaps the most-defining feature of Gen Z is the group’s high level of stress and anxiety due to climate change. According to COGNITION insights, more than half of Gen Zs surveyed report feelings of sadness, anger, powerlessness, and helplessness when it comes to mitigating the impacts of climate change, and nearly 50 percent feel ignored when they try to express their climate anxiety.
COGNITION data shows that:
- 60 percent want to see a restructuring of our economy with equality and climate change in mind
- 61 percent want to see climate action that is as urgent as COVID response
- 85 percent claim that they have greatly been affected by climate change
- 64 percent feel guilty about their negative impact on the environment
- 73 percent support using public protests to raise awareness about climate change and other important issues
In line with their personal values, Gen Zs are demanding unforeseen levels of climate engagement and accountability from their friends, colleagues, and the companies they work for and buy from.
Publisher’s Note: This content is made possible by our Today’s Homeowner Campaign Sponsors. These companies take sustainability seriously, in both their products and their operations. Learn more about building and buying homes that are more affordable and less resource intensive.