2025 NextGen Homebuyer Report: FINANCIAL LITERACY EDITION
About the Report
The 2025 Financial Literacy Edition explores 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.
What's New This Year:
Expanded psychological analysis of decision confidence, trust patterns, and cognitive load
Enhanced focus on neurodivergence with 27% of respondents identifying as neurodivergent
AI and digital tool adoption tracking how ChatGPT and social media are reshaping information gathering
Updated Financial Literacy Quiz reflecting two years of data analysis and industry feedback
FirstHome IQ Quiz - Validated Assessment Tool
The FirstHome IQ Quiz serves as the study's primary homebuyer literacy measurement instrument. Originally developed and validated in 2023, this assessment has collected over 5,000 responses, establishing baseline measurements and reliability benchmarks for homebuyer financial knowledge.
About NextGen Research
The 2025 NextGen Homebuyer Research Series is designed to provide insights into the evolving homeownership landscape for Gen Z and Millennial buyers. In its fifth year, this report presents its 10th study, utilizing data analysis from more than 7,500 respondents collected since 2020.
The 2025 Financial Literacy edition is based on a survey of 500 individuals aged 18-44, conducted in partnership with National MI and FirstHome IQ, two organizations dedicated to expanding homeownership accessibility through financial education and lending solutions.
Key Insights
The Down Payment Myth Remains – Nearly 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 Misunderstood – Only 35% recognize its main benefit (enabling smaller down payments), and just 57% know it can be removed during the loan term.
Design Matters – 72% wish financial resources were designed in a simpler, more visual way.
Financial Overwhelm May Lead to Delays – 52% feel overloaded by financial information, and 51% have delayed major financial decisions due to complexity.
Gen Z Leans into Influencers for Homebuying Information – 41% of Gen Z trust influencers for homebuying advice, and 71% use TikTok for research.
AI Goes Mainstream – 61% would use AI tools like ChatGPT for homebuying information, up from 35% in January 2025.
Confidence ≠ Competence – Women 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 Beneficial – Buyers who expressed some distrust of lenders actually performed better on financial literacy assessments than those with complete trust.
Two Dominant Buyer Mindsets – Over half of NextGen (53%) said personal financial education was not taught in school with an additional 29% indicating it was optional or a short lesson.
Generational Knowledge Gap – Quiz scores rise with age: Gen Z (67.0%), Younger Millennials (71.1%), Older Millennials (74.1%).
Don’t miss the Full Report (in addition to the slides above) where you can access additional information, context, and actionable insights not available in the slides.