Tips for Younger Homebuyers: How To Make Your Dream a Reality

Tips for Younger Homebuyers: How To Make Your Dream a Reality

If you belong to a younger generation, such as Gen Z, you might be pondering the question: will homeownership ever be attainable for me? It's understandable to feel concerned, especially with factors like inflation, increasing home prices, rising mortgage rates, and other challenges potentially hindering your prospects.

While it's undeniable that the current housing market poses challenges for first-time homebuyers, achieving your homeownership goals is still possible, especially with the guidance of professionals.

Here are some valuable tips you can expect from a real estate expert.

1. Explore Your Options for a Down Payment

If your primary concern is the down payment, there are avenues to bolster your savings. With over 2,000 down payment assistance programs available, homeownership becomes more attainable. Moreover, assistance may come from loved ones, with 49% of Gen Z homebuyers receiving financial support from family members, as per LendingTree.

Furthermore, contrary to popular belief, a 20% down payment is not always necessary, unless mandated by your loan type or lender. Collaborate with a reputable mortgage professional to assess your options, determine your actual requirements, and understand any regulations regarding financial gifts from family.

2. Live with Loved Ones To Boost Your Savings

Another strategy adopted by many Gen Z buyers involves leaving their rental accommodations and opting to reside with friends or family. This move can substantially reduce housing expenses, enabling accelerated savings growth. As elucidated by 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.”

3. Cast a Broad Net for Your Search

Once you've amassed sufficient savings, a professional will assist you in navigating your home search. Given the ongoing scarcity of homes for sale and the challenge of affordability, they'll introduce strategies and options that might not have crossed your mind, broadening your scope of possibilities.

For instance, exploring suburban or rural areas is often more cost-effective compared to urban locales. While urban environments offer vibrancy and activity, the lower cost of living in less densely populated areas may warrant consideration. Additionally, contemplating smaller residences like condos or townhouses further expands your entry points into the market. As highlighted by Colby Stout, Research Analyst at Bright MLS:

“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, a real estate agent can assist you in discerning between your essential requirements and desirable features. It's essential to recognize that your first home doesn't necessarily have to be your forever home. The primary goal is to enter the market and commence building equity. If homeownership is your aim, you might discover that making certain concessions is worthwhile. As Chase emphasizes:

“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 help you prioritize your list of home features and find houses that can deliver on the top ones. And they’ll be able to explain how equity can benefit you in the long run and make it possible to move into that dream home down the line.

Bottom Line

Real estate professionals have expertise on what’s working for other buyers like you. Lean on them for tips 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.