If you're a younger member, like Gen Z, you might be wondering: will I ever be able to buy a home? Chances are, you're worried that it's just not in the cards with inflation, rising home prices, mortgage rates, and more seemingly stacked against you.
While it's clear that this housing market is tough for first-time homebuyers, it's still doable, especially with professionals on your side.
Here are some useful tips:
- Explore Your Options for a Down Payment
If saving up for a down payment is your main hurdle, you might have some options to give your savings a boost. There are over 2,000 down payment assistance programs out there to make homeownership more achievable. Plus, getting a little help from loved ones might be on the table. According to LendingTree, 49% of Gen Z homebuyers got money from family that they used toward a down payment.
And you most likely won't need to put down 20% (unless it's required by your loan type or lender). So, make sure to team up with a trusted mortgage professional to check out your options, figure out the actual amount you'll need, and get the lowdown on any rules about receiving a gift from loved ones.
- Live with Loved Ones To Boost Your Savings
Another thing many Gen Z buyers are doing is giving up their rental and moving back in with friends or family. This can help lower your housing costs, so you can beef up your savings much faster. According to Bankrate:
“. . . many have opted to stop renting and live with family in order to boost their savings. Thirty percent of Gen Z homebuyers move directly from their family member’s home to a home of their own, according to NAR.”
- Cast a Broad Net for Your Search
When you've saved up enough, here's how a pro will help you tackle your search. With the supply of homes for sale still low and affordability tight, they'll give you tips and options you may not have thought of to widen your range of choices.
For example, it's usually cheaper to look at rural or suburban areas instead of urban ones. So, while the city may be more lively and exciting, the lower cost of living may be a good reason to consider something further out. And if you think about smaller homes, condos, or townhouses, you'll have even more ways to get into the market. As Colby Stout, Research Analyst at Bright MLS, puts it:
“Being flexible on the types of home (e.g., a condo or townhome versus a single-family home) and exploring more affordable neighborhoods is important for first-time buyers.”
- Take a Close Look at Your Wants and Needs
Lastly, really think about what you must have and what would be nice to have. Remember, your first home doesn't have to be your forever home. You just need to get your foot in the door to start building equity. If you want to buy, you may find making some compromises is worth it. As Chase says:
“An open-minded approach to house-hunting may be one way for Gen Z homebuyers to maintain some edge. This could mean buying in areas that are less expensive. Differentiating needs vs. wants may help in this area as well.”
A professional agent will help you figure out which home features are most important and find houses that meet those needs. They can also explain how equity can benefit you in the long run and make it possible for you to move into your dream home down the line.
Bottom Line
We as Team Prerana Saraiya, have years of expertise on what’s working for other buyers like you. Lean on us for tips and advice on ways you can get ready to buy.
For more info and to schedule a meeting, email us at [email protected]
