If you belong to a younger generation, such as Gen Z, you might be wondering if owning a home is a realistic goal. With inflation, increasing home prices, mortgage rates, and other factors seemingly working against you, it’s natural to be concerned.
While the current housing market presents challenges for first-time buyers, homeownership is still attainable, especially with the guidance of professionals. Here are some useful tips you might receive from an expert.
1. Consider Your Down Payment Options
If saving for a down payment is your main challenge, there are ways to give your savings a boost. There are over 2,000 down payment assistance programs aimed at making homeownership more attainable. Additionally, receiving financial help from loved ones is a common practice, with 49% of Gen Z homebuyers using such funds for their down payment, as reported by LendingTree.
Furthermore, you may not need to put down the traditional 20% (unless required by your loan type or lender). It’s essential to collaborate with a reputable mortgage professional to explore your options, determine the actual amount you’ll need, and understand any regulations regarding receiving a gift from family or friends.
2. Increase Your Savings by Living with Family or Friends
A growing trend among many Gen Z buyers is forgoing renting and returning to live with relatives or friends. This decision can significantly reduce your housing expenses, allowing you to build your savings more quickly. According to Bankrate:
“Many individuals have chosen to forego renting and reside with family to accelerate their savings. According to NAR, thirty percent of Gen Z homebuyers transition directly from living with family to owning their own home.”
3. Broaden Your Search Horizons
When you’ve accumulated sufficient savings, a professional can guide you in approaching your home search. Given the limited supply of homes for sale and the tight affordability, they’ll offer strategies and explore avenues you might not have considered to expand your range of options.
For instance, opting for a rural or suburban area is often more cost-effective than an urban one. While city living may offer vibrancy and energy, the lower cost of living in outlying areas could make them worth considering. Additionally, considering smaller homes, condos, or townhouses can provide even more entry points into the market. As Colby Stout, Research Analyst at Bright MLS, notes:
“Remaining flexible regarding the type of home (e.g., a condo or townhome versus a single-family home) and exploring more affordable neighborhoods is crucial for first-time buyers.”
4. Carefully Consider Your Desires and Requirements
Lastly, a real estate agent can assist you in evaluating your must-haves and nice-to-haves. Keep in mind, your first home doesn’t have to be your forever home; it’s simply a step towards building equity. If purchasing is your goal, you might find that making certain compromises is worthwhile. According to Chase:
“Maintaining a flexible mindset during the home search could be advantageous for Gen Z homebuyers. This might involve purchasing in more affordable areas. Distinguishing between needs and wants can be helpful in this regard.”
An agent will help you prioritize your list of home features and identify properties that align with your top priorities. They can also explain how equity can benefit you in the long term, potentially enabling you to move into your dream home later on.
Bottom Line
Rely on real estate professionals for insights into successful strategies employed by other buyers similar to you. Seek their guidance and advice throughout your journey. As Directors Mortgage emphasizes, with their assistance, you can achieve your goal:
“The path to homeownership may not be a direct one for Gen Z, but it is certainly attainable. By employing effective strategies, such as exploring down payment assistance programs and sharing living expenses with family, you can move closer to realizing your dream of owning a home.”
Let’s connect to ensure you’re on track for lasting success.
