Trust among Gen Zers (born between 1997 and 2012) in financial institutions has collapsed in the last 12 months, according to a new study. "Over the past year, trust in financial institutions has plummeted from 61.5% in 2024 to just 40% in 2025, with loan officers experiencing an even more precipitous decline to 19.5%," says the 2025 NextGen Homebuyer Report.
Just one in five who responded to the report's survey trusted mortgage lenders' loan officers, while one in three trusted Realtors or real estate agents (those not members of the National Association of Realtors).
Such a collapse in confidence over a single year is very rare and should be deeply troubling for the financial sector. And it's especially worrying as Gen Zers are increasingly turning to social media, AI and peer networks for financial information, says the survey.
Unreliable Sources
Of course, such sources sometimes provide reliable information from impeccable sources. But social media are known for their propagation of misinformation, while AI is notorious for its "hallucinations."
We used Google's AI to tell us about AI hallucinations: "AI hallucination is when a generative AI produces inaccurate, misleading or entirely fabricated information presented as fact, similar to how humans experience hallucinations," it says. "These fabrications can include non-existent facts, citations, code, or events. The cause stems from factors like poor-quality training data, the AI's underlying generation methods, and unclear input prompts."
That's entirely correct to the best of our knowledge. But much of AI's output is far from trustworthy.
Peer networks are similarly unreliable. Of course, some people will be lucky enough to have a loan officer, mortgage banker or other financial professional in their circle of friends. But relying on a non-expert pal's understanding or misunderstanding of crucial financial facts could be dangerous.
Jaded By Disaster
The NextGen Homebuyer report suggests some reasons for the catastrophic decline among young adults in financial institutions.
One especially persuasive one is that they have lived through a series of financial disasters, including the 2007-09 financial crisis, which was largely triggered by the banking sector, and destabilizing events such as the COVID pandemic. They've also seen bank scandals, such as the ones that dogged Wells Fargo, and even some bank collapses.
Gen Z Relies on Social Media, YouTube
Meanwhile, trust in all institutions has been in decline for two decades, according to the 2024 Edelman Trust Barometer, which tracks trust levels in 26 countries. It was in 2005 that Edelman first reported that "trust shifts from authorities to peers."
In other words, younger consumers would rather hear a first-hand account from a friend than from a professional.
The NextGen study states that Gen Z gets their homebuying education from:
- YouTube (74%)
- Instagram and TikTok (46%)
- AI (43%)
In other words, if industry professionals aren't leveraging video and social media, they shouldn't expect to get younger homebuyers as clients.
How Can Trust Be Regained?
The NextGen report suggests a way forward:
"For housing and financial professionals, this trust deficit presents both a challenge and an opportunity. Rebuilding trust will require unprecedented levels of transparency, personalized communication, and commitment to the financial well-being of NextGen buyers."
