Growing up during a recession has not discouraged Generation Z customers away from credit products, including mortgages, according to a study from TransUnion. Gen Z, or those born after 1995, have been influenced not just by favorable economic conditions, but technological advancements, TransUnion notes.
“Gen Z is the first generation of digital natives, and they have come to expect a seamless consumer experience across all walks of life – including how they access, use and manage credit,” said Jason Laky, EVP and Head of Financial Services at TransUnion. “Our belief is that the desire for credit among this generation is significant across the board, and improving economic conditions will likely serve as a springboard for more credit, especially in emerging credit markets. It’s critical for lenders in both emerging and established economies to have the ability to make more informed decisions on prospective customers and earn their trust as well as their business.”
While credit cards are the most popular credit product among Gen Z, mortgages are the fastest growing product, expanding by 52% year-over-year. Gen Z is also on-par with Millennials in home loans: 2% of both credit-active millennials and Gen Z hold mortgages.
“The oldest set of Gen Z consumers came of age during an elongated economic expansion and relaxed underwriting environment, which allowed for a comparatively easier entrance into the credit market than their Millennial counterparts,” said Matt Komos, VP of U.S. research and consulting for TransUnion. “Gen Z has been able to access credit cards and auto loans with greater ease, particularly because lenders have been extending their buy-box into non-prime – which has been beneficial to these Gen Z consumers as they enter the credit market.”