Younger Americans willing to make sacrifices to find affordable homes
Jul 18, 2023, 1:15 PM
FILE: A for sale sign is pictured in Salt Lake City on Thursday, July 15, 2021. Most Americans still think owning a home is part of the American Dream. Aspiring homeowners are willing to make some big sacrifices, according to a survey. (Kristin Murphy/Deseret News)
(Kristin Murphy/Deseret News)
SALT LAKE CITY — Everyone wants to be a part of the American Dream, but younger Americans are struggling to find affordable homes to begin the journey.
A new poll by Bankrate found the majority of Generation Z and millennials who do not own a home said they’re willing to make a sacrifice to find more affordable homes.
Sarah Foster, U.S. Economy Reporter for Bankrate spoke with KSL at Night to discuss the differences between generations when it comes to searching for a home.
Sacrifices to find affordable homes
According to Foster, we are seeing a consequence of a historically competitive and historically tough housing market. Where borrowing costs are high, and inventory is low.
“Housing prices are expensive. These long-standing underdogs, I kind of like to think of them as Gen Z and millennials who’ve consistently struggled to buy a home. They’re kind of wondering now. Do I have to make a sacrifice in order to be able to buy something that’s in my price range?”
What are those sacrifices?
“Most commonly, younger Americans are indicating a willingness to move out of state to find an affordable house. Buy a fixer-upper, and either downsize or take on roommates,” Foster explained.
Other sacrifices also include moving away from friends and family to a less desirable and more affordable area.
Two of the biggest reasons younger Americans are not able to purchase a home, according to the study, is due to the down payment and high-interest rates.
30% of Gen Z said that it’s because they can’t afford the down payment, while 43% of millennials said the same. Also, 22% of Gen Z and 31% of millennials said mortgage rates are too high.
Foster said she is seeing private lenders step up and offer new opportunities to help new homeowners.
“You have to offer opportunities out there for these first-time homebuyers to help them crack the market because if you have a huge proportion of these younger borrowers unable to enter the market, it has consequences, kind of the ripple effects, economically speaking.”
One tip Sarah wants to give younger Americans is to think about homeownership and what they are hoping to achieve that they can’t through renting.
“Hope could be on the horizon. Even just a year or two of home price gains could help your income catch back up.”
Related
- Salt Lake City housing plan includes 10K new units within five years
- Utah’s first-time homebuyer aid program begins Tuesday
- Deeply affordable housing for seniors and veterans experiencing homelessness unveiled
