2025 NextGen Homebuyer Report: Financial Literacy Edition
Financial knowledge, psychological barriers, and where NextGen buyers actually go for answers when school never taught them.
Financial literacy edition
Only 8% know the real minimum down payment.
- 72%
- wish financial resources were simpler and more visual
- 61%
- would use AI tools for homebuying information
- 41%
- of Gen Z trust influencers for homebuying advice
About the report
The 2025 Financial Literacy Edition is a comprehensive examination of financial knowledge, psychological barriers, and information-seeking behaviors among NextGen homebuyers. The findings reveal a generation caught between aspiration and anxiety: buyers who want to succeed but feel overwhelmed by complexity, who distrust traditional institutions but crave reliable guidance, and who are turning to AI tools and social media to fill knowledge gaps that formal education failed to address.
New this year: expanded psychological analysis of decision confidence, trust patterns, and cognitive load; an enhanced focus on neurodivergence, with 27% of respondents identifying as neurodivergent; AI and digital tool adoption tracking; and an updated financial literacy quiz reflecting two years of data analysis and industry feedback.
Key insights
- The down payment myth remainsNearly half of NextGen believe you need 20% down to buy a home, and only 8% correctly identified the minimum down payment for a conventional loan (3%).
- Mortgage insurance is misunderstoodOnly 35% recognize its main benefit, enabling smaller down payments, and just 57% know it can be removed during the loan term.
- Design matters72% wish financial resources were designed in a simpler, more visual way.
- Financial overwhelm leads to delays52% feel overloaded by financial information, and 51% have delayed major financial decisions due to complexity.
- Gen Z leans on influencers41% of Gen Z trust influencers for homebuying advice, and 71% use TikTok for research.
- AI goes mainstream61% would use AI tools like ChatGPT for homebuying information, up from 35% in January 2025.
- Confidence is not competenceWomen report significantly lower confidence than men (38% vs. 47%) yet perform equally well on literacy assessments. Lower confidence often correlates with more thorough research.
- Blind trust is not beneficialBuyers who expressed some distrust of lenders performed better on financial literacy assessments than those with complete trust.
- Generational knowledge gapQuiz scores rise with age: Gen Z 67.0%, younger Millennials 71.1%, older Millennials 74.1%.
Method
Survey of 500 individuals aged 18 to 44, conducted in partnership with National MI and FirstHome IQ. The tenth study in the series, drawing on more than 7,500 respondents collected since 2020.