Image via Lucélia Ribeiro/Wikimedia

While the founding fathers certainly got it right with life, liberty and the pursuit of happiness, many would agree that today’s American Dream is firmly rooted in home ownership. And while every generation has its own unique characteristics that have helped shape our country, owning a house has remained a core aspiration.

As the latest generation comes of age, it’s worth taking a closer look at this group to see if they not only buy into the U.S. home-ownership philosophy that has prevailed for so many years, but if they can even afford a property. For if they don’t have the purchasing power to buy homes, it could have a disastrous, domino-like effect on the entire residential real estate complex by throwing off the balance of supply and demand.

So, just who are these people who will unwittingly help determine the future value of the U.S. housing market?

Meet Generation Z.

Born from about the mid-1990s to early 2000s right behind Millennials, Gen Z is like no other generation. Technologically savvy, intelligent and pragmatic, this group is the most diverse in history.

With the oldest members of Gen Z now adults and just starting to consider life on their own, there are several issues to analyze when considering their future home purchasing power. For starters, are they even drawn to buying houses?

Apparently, they are.

According to Better Homes and Gardens Real Estate, 97 percent of Generation Z believe that they will own a home in the future, and 82 percent signal that homeownership is the most important factor in achieving the American Dream.

Another pressing question for Gen Z is whether they’ll even be able to afford a home. Specifically, will U.S. economic growth over the coming years spark job creation and consumer confidence, which in turn, drives interest in home buying. Considering the group’s average age, it’s still too early to get a reading on the prospects for the economy as well as Gen Z’s approach to real estate.

Further, current economic indicators are sending mixed signals.

The most recent Labor Department report said the economy added 222,000 jobs in June, exceeding economists’ expectations. Yet, despite President Donald Trump’s campaign pledge to create good-paying U.S. manufacturing jobs, wage growth has been slow and the highest gains in the labor market were in low-paying service industry jobs. Also, employment growth has averaged 180,000 per month so far this year, compared with 187,000 a month in 2016 and 226,000 in 2015.

The widening gap between wealthy and poor Americans is another factor to consider as Gen Z comes of age. Home prices have been on the rise since 2012 and nearing their 2006 highs, yet the divide between rich and poor has pushed the odds of kids earning more money than their parents down to around 50 percent – a significant drop from 1940, when 90 percent of children were bound to bypass their parents on the income ladder.

Yet, despite concerns about these economic signals, there is reason to be hopeful about the home-buying prospects of Gen Z. Interest rates remain at historic lows; banks have eased credit standards over the last few years as the economy has grown; President Trump’s vow to roll back regulations across the business landscape could be an enormous boon to economic growth and family balance sheets.

Along with these economic and political factors, it’s worth looking at what might drive Gen Z toward home ownership. Widely recognized as grounded and intelligent, Gen Z is likely to gravitate toward the value proposition of home ownership, particularly in urban areas. The most culturally diverse generation in history, Gen Z has been immersed in technology since Day 1 and is uniquely qualified to both thrive in today’s digital economy and support the housing markets in and around the urban areas they may eventually call home.

So, can we count on Gen Z to have the buying power to support the housing market? It’s still too early to tell. But if economic growth aligns with favorable market conditions it’s quite likely they’ll get their chance to live out the American Dream in large numbers.