Tips for Younger Homebuyers: Turn Your Dream Into A Reality

If you’re a member of a younger generation, like Gen Z, you may be asking the question: will I ever be able to buy a home? And you are probably worried that will not happen, given inflation, rising home prices, mortgage rates, and other factors that appear to be working against you.

While there is no denying that this housing market is difficult for first-time homebuyers, it is still possible, especially if you have professionals on your side.

Here are some helpful tips you may get from a pro.

1. Explore Your Options for a Down Payment

If making a down payment is your biggest challenge, there may be ways to boost your savings. There are over 2,000 down payment assistance programs designed to make homeownership more accessible. And that is not the only place you could find assistance. While it may not be an option for everyone, 49% of Gen Z homebuyers got money from loved ones that they used toward a down payment, according to LendingTree.

And chances are you won’t need to put 20% down (unless specified by your loan type or lender). So, consult with a trusted mortgage professional to explore your options, determine how much you will actually need, and learn about any guidelines for receiving a gift from loved ones.

2. Live with Loved Ones To Boost Your Savings

Another trend among Gen Z buyers is to leave their rental homes and move back in with friends or family. This can help reduce your housing costs, allowing you to build your savings much faster. As Bankrate explains:

“. . . 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.”

3. Cast a Broad Net for Your Search

When you have saved enough, here's how a professional will assist you with your search. Because the supply of homes for sale remains low and affordability is limited, they will advise you on strategies and avenues you may not have considered to broaden your options.

For example, it is usually less expensive to live in a rural or suburban area than in an urban one. So, while the city may be livelier and more energetic, the cost of living may be compelling enough to consider something further out. And if you consider smaller homes, condos, or townhouses, you will have even more opportunities to enter the market. As Colby Stout, Research Analyst at Bright MLS, explains:

“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.”

4. Take a Close Look at Your Wants and Needs

Finally, an agent can help you think about your must-haves and nice-to-haves. Remember that your first home does not need to be your forever home. You only need to get your foot in the door to begin building equity. If you want to buy, you may decide that making some compromises is worthwhile. 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.”

An agent will assist you in prioritizing your list of home features and locating properties that can meet the most important of them. They will also be able to explain how equity can benefit you in the long run, allowing you to move into your dream home later on.

Bottom Line

Real estate professionals understand what works for buyers like you. Lean on them for help and advice along the way. As Directors Mortgage says, with that support you can make it happen:

 

The path to homeownership may not be a straightforward one for Gen Z, but it’s undoubtedly within reach. By adopting the right strategies, like exploring down payment assistance programs and sharing living costs with relatives, you can bring your dream of owning a home closer to reality.”

 

Let’s connect to get you set up for long-term success.

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