FinLocker Study on the Financial Habits of Future Homebuyers

FinLocker releases a study of the financial goals of future homebuyers and what drives them to begin their homeownership journey

Atlanta, Aug. 04, 2022 (GLOBE NEWSWIRE) -- Younger generations have begun to dominate and shape the homebuying market. In 2022, the National Association of REALTORS® identified that 43% of homebuyers were Millennials and 2% of homebuyers were Gen Z. While many more consumers aspire to become homeowners, they often face challenges and obstacles along the way.

Across all states and demographics, the top three reasons for a mortgage application being denied in 2021 were high debt-to-income ratio, low credit score, and insufficient savings to cover their down payment and closing costs.

FinLocker believes that homeownership should be attainable and sustainable for everyone, regardless of socioeconomic status. We are committed to working with mortgage lenders, banks, credit unions, and related financial institutions and businesses to understand the challenges often facing homebuyers. Together we can overcome the obstacles facing many future homeowners on their path to achieving the American Dream.


Who are the future homebuyers?

To better understand the financial habits of future homebuyers, FinLocker partnered with students in the American Marketing Association’s group at the University of Southern California (USC).

Over a four-week period from mid-March to mid-April 2022, the USC students interviewed Millennials, defined as those born between 1981 and 1996, and Gen Z, defined as those born between 1997 and 2012. However, the average age of Gen Z survey respondents was 20.3 years old, so that they could provide relevant responses to the survey questions.

The survey was designed to determine:

  1. How the next generation of homebuyers manages their personal finances.
  2. How are they planning to achieve their financial goals?
  3. How is the next generation of homebuyers planning to buy a home in the future?


Identifying the financial habits of future homebuyers

When it comes to using budgeting tools to manage their finances, Millennials were evenly split using personal finance apps (45%) and spreadsheets (43.1%). In comparison, most Gen Z preferred personal finance apps (52%) over spreadsheets (12.3%). However, 33.3% of Millennials and 49.1% of Gen Z do not use any tool to manage their finances. With the oldest Gen Zers just graduating college and the youngest still in middle school, this admission identified an opportunity for financial institutions to connect with the 73% of smartphone users who said they used an app to manage their finances in the month prior to taking the survey.

The prevalence of free credit monitoring tools has made it easier for future homebuyers to monitor their credit score. Most Millennials (82%) and Gen Z (54.5%) regularly monitor their credit score, and 88.8% of both groups prefer to use their bank’s app or website for credit score monitoring rather than a personal financial management app.

To monitor their credit report, the top choice for both groups is FICO (46.9%), closely followed by going directly to one of the three credit bureaus (43.6%), with TransUnion (18.6%) being their preferred bureau. However, most respondents were unaware that FICO offered a paid service for credit report monitoring, so they were likely obtaining their FICO credit score from their banking app or website and obtaining their credit report directly from the credit bureaus.

Both groups of future homebuyers strongly prefer using free tools provided by reputable financial institutions to monitor their credit score and credit report. Of the total finance app users who downloaded a paid app, 38% reported doing so because the app offered features or functionality unavailable on free alternatives. Providing future homebuyers with a feature-filled free private-label app will enable them to monitor their credit score and credit report in one place rather than juggle multiple apps and websites to accomplish the same tasks.

Mortgage lenders using this tactic have two advantages:

  1. They can establish their reputation as a trustworthy source of financial information long before future homebuyers enter the home buying process, and
  2. They can begin to establish a relationship with the homebuyer before their competitors.


Financial goals of future homebuyers

A high proportion of both groups had identified financial goals to achieve in the next five years. Their financial goals reflected the differences in their stage of life. Millennials, who are more likely to have already bought a car and started to accumulate credit card debt, aimed to buy a home, pay off loans/debt, then buy a car. While the leading financial goals of Gen Z respondents were first to buy a car, buy a home, then pay off loans/debt. Interestingly, for two generations early in their financial life, both groups rated achieving financial freedom, which they defined as being debt-free and having savings to buy a house, as their top priority.

 MillennialsGen Z
Financial freedom61.5%80.8%
Buying a home51.3%30.8%
Paying off loans / debt46.2%23.1%
Buying a car23.1%50%
Supporting a family17.9%28.8%


How are future homebuyers saving to achieve their financial goals?

According to the National Association of REALTORS®2022 Home Buyers and Sellers Generational Trends report, savings are the primary source of a down payment for homebuyers 23 to 31 (86%) and 32 to 41 (72%). It is, therefore, optimistic to see that future homebuyers are establishing saving habits early.

Banks and credit unions have a head start on independent mortgage lenders capturing the business of future homebuyers because Millennials and Gen Z are either saving in a regular bank account or a separate savings account.

Where do you put your savings? 

 Millennials Gen Z
Regular bank account49%78.9%
Separate savings account49%66.7%
Invest in stocks47.1%26.3%
401K, Roth IRA, other Retirement account23.1%10.5%
Crypto Assets17.9%10.5%
Health Savings Account2%1.8%

Marketing to future homebuyers

Lenders can become the trusted advisor that future homebuyers seek

Like many first-time homebuyers, the Millennials and Gen Z survey respondents lack a solid understanding of how to improve their credit profile, the mortgage process, and the amount of time it takes to buy a home.

The majority of Millennials conceded that they need to improve their knowledge of the homeownership process, including finding a real estate agent, home loans, down payments, etc.

When Millennials were asked to rate their knowledge of the home buying process, 32.6% confidently rated their knowledge 8, 9, or 10 out of 10. However, 49.8% rated their knowledge only a 1, 2, or 3 rating out of 10.

Both groups of future homebuyers primarily learn about personal finance topics, such as how to save and follow budgets, from family and friends. However, Millennials next preferred finance websites, personal finance blogs, and influencers before social media. Gen Z respondents overwhelming turned to social media before any other source.

With both groups of future homebuyers using social media platforms between 1-5 hours each day and preferring YouTube to learn about personal finance, there is a tremendous opportunity for mortgage lenders, banks, and credit unions to drive exposure to their business through financial education.


Where do you go to learn about personal finance topics?

 Millennials        Gen Z
Friends and family   33.3%50.9%
Websites (e.g. Motley Fool, The Balance)  25%5.5%
Personal finance blogs and influencers 18.8%5.5%
Social media     16.7%34.5%
Books and podcasts     4.2%3.6%

Both Millennials (80.4%) and Gen Z (93%) respondents would eventually like to buy a home. Knowing the motivating factors of future homebuyers can be used as additional topics for social media posts and blogs.


Why would you like to buy a home?                                                              

 Millennials  Gen Z
Buying a home is a good investment  34.1%49.1%
I want the financial stability of having a payment, and not renting 29.3%18.9%
Buying a home will enable me to build wealth12.2%11.3%
Want more space or to live on their own  12.2%11.3%
Buying a home will be good for my family    9.8%5.7%
Buying a home will provide financial security2.4%3.8%

What drives future homebuyers to begin their homeownership journey?

FinLocker has conducted extensive user research focused on leading indicators of a borrower entering their homeownership journey. The mortgage industry commonly uses high-cost lagging indicators, like credit and MLS listing triggers to identify new leads. However, as the survey validates, there is a more equitable opportunity to engage a consumer: connecting at the top of the marketing funnel during their point of thought. Our research informs us of four primary activities most consumers undertake (sequence may vary within each consumer segment) as a precursor to their homeownership journey.

  1. Consumers begin their homeownership journey by forming a mental picture of their new home. During the property exploration phase, consumers identify where they would like to live, the type of home, neighborhood, schools, etc., well before they connect with a real estate agent or mortgage originator. 
  2. Consumers research how they will finance their home purchase. In this phase, consumers seek answers to understand their potential buying power, the mortgage products they may qualify for their purchase, and the companies and prices offered for those products. 
  3. Consumers review their credit profile to understand their credit score and its impact on pricing, eligibility, and affordability.
  4. Consumers decide if their finances and cash flow can support a mortgage payment. In this phase, the consumer develops their financial picture of cash flow, housing expenses, and discretionary spending implications.

To better understand how to reach future homebuyers at their point of thought, we need to know the factors that future home buyers use to determine when they are ready to start their homeownership journey.

The study has already identified that future homebuyers know they need to be educated on ways to build credit and budget their income. However, they also need support during the initial stages of their homeownership journey when they are actively saving, paying off debt, and monitoring their credit.

How will you determine when you are ready to buy a home?

When I have sufficient savings: 73.9%

When I have a good credit score: 11.9%

When I have a family of my own: 11.9%

Other: 2.4%

The ability to save is also impacted by the number one factor that delays future homebuyers from considering homeownership – debt. Nine out of ten Gen Z survey respondents had educational loans, and 26.8% had credit card debt.

Debt is an obstacle that prevents or delays homeownership for many future homebuyers. Among the class of 2020, 55% of bachelor’s degree recipients took out student loans, graduating with an average of $28,400 in federal and private debt, according to Student Loan Hero.

Student loans were the primary expenses that delayed 49% of young millennials and 44% of older millennial homebuyers, a median of 3-4 years from saving for a down payment or buying a home, according to the National Association of REALTORS®2022 Home Buyers and Sellers Generational Trends.

Helping future homebuyers to achieve homeownership presents challenges to the mortgage industry. However, mortgage lenders have clear opportunities to reach them by understating their needs and responding to the drivers they use to determine when they are ready to proceed with their first home purchase. This study, which was conducted by future homeowners, was to understand the challenges facing these consumers so the industry can provide them with trusted resources and objective information to help them navigate their own path to homeownership.


Summary of survey respondents


Female: 51%

Male: 49%



22% > Up to $30,000

22% > $30,000 - $50,000

10% > $50,000 - $70,000

6% > $70,000 - $100,000

40% > Over $100,000


About FinLocker

FinLocker provides mortgage lenders with a competitive advantage to attract future homebuyers to their business long before they begin taking actions that put them on the radar of other mortgage lenders.

As the survey highlights, saving is the most significant factor for Millennials' homebuying decisions. The core financial fitness tools in FinLocker – credit health, financial accounts management, trackable savings goals, and customizable budgets - were designed to engage consumers of all ages meaningfully. Future homebuyers can begin their financial life by establishing good financial habits and saving to achieve early financial goals while learning from the educational resources while interacting with your brand in your private-labeled FinLocker.

When a future homebuyer determines they are ready to begin their homeownership journey and selects the goal of "first-time homebuyer" in their FinLocker, personalized journeys are triggered to introduce them to the Readiness tool. This proprietary tool, created by FinLocker, aggregates and analyzes their enrolled financial data and outputs their current status for mortgage eligibility. Consumers are also provided with the actions they need to take to get mortgage ready, including saving more for their down payment, raising their credit score, and reducing their debt-to-income ratio.

Future homebuyers can research the current sales prices of homes in their desired neighborhoods using the Property widget powered by HomeScout. The home affordability calculator analyzes their income and recommends a home budget and monthly mortgage payment based on their income. The calculator also shows the amount they need to save for their down payment and closing costs.

FinLocker makes it easy for future homebuyers to achieve their savings goals. Within a few clicks on their FinLocker app, consumers can create a trackable savings goal for their down payment and assign a bank account that perpetually updates each goal. To reduce their debt-to-income ratio, they can also create trackable goals to pay off credit cards and other high-interest personal loans.

Future homebuyers can track their progress towards mortgage readiness using the perpetually updated Readiness tool. When they've achieved mortgage eligibility, they can verify their income and employment in the FinLocker app and share their financial data and documents with their mortgage originator to begin their mortgage application.

FinLocker supports customers for their entire financial life

Banks and credit unions can provide their consumers with a private-labeled FinLocker before they've graduated college to position their financial institution to retain and recapture multiple financial transactions.

Most consumers conduct five to seven mortgage-related transactions during their lifetime. Mortgage lenders can distribute their private-label FinLocker to college students to financially prepare them for their first home loan and retain them for refinancing and additional purchase loans.

Mortgage lenders and financial institutions who partner with businesses to offer auxiliary financial services, such as credit counseling, home insurance, and wealth management, are best positioned to be the center of their customer's entire financial life.

FinLocker’s mission is to enable people to achieve the dream of homeownership and financial well-being. We are committed to providing the mortgage industry with trusted tools and resources that can help make this happen.



FinLocker would like to thank the students of the American Marketing Association group at the University of Southern California for conducting the survey and presenting their finding and recommendations to FinLocker.

  • Atharva Bubna - Computer Science & Business Administration
  • Ambar Dange - International Relations Global Business
  • Mia Fong - Economics
  • Ryan Jung - Product UX Design
  • Rohan Nishtala - Industrial Engineering: Operations Management and Supervision
  • Charlie Rez - Economics and Data Science

Additional Contributors

  • Yee Young (YY) Cher - Business Administration
  • Isaac Wu - Industrial Systems Engineering & Business Administration























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The Financial Habits of Future Homebuyers