With the burden of student loans and rising housing costs, many younger Americans may feel buying a home is out of reach for them. However, many more remain optimistic about their home-owning goals and are proactively taking steps to ensure their dreams are met.
Gen Zers, the group of Americans born between 1998 and 2016, are planning to become homeowners. 79% of Gen Zers plan to own a house someday vs. 4% who said they definitely do not want to own one. 59% of those ages 18 to 23 want to buy a house in the next five years and a majority have already started saving for one, according to a Bank of America survey.
Gen Zers recognize that saving for a house is not easy, so they are taking a pragmatic approach and prioritizing savings over spending, getting second jobs, or moving in with their parents. They said that saving for a house is more important than other goals such as planning for a wedding or taking a vacation.
The chief economist at relator.com said the most important thing Gen Zers can do is “start saving as much as possible early on and let compound interest do the heavy lifting.”
Five millennials profiled in Business Insider who became homeowners in their 20s all mention budgeting and cutting down expenses as the reason they were able to save for a down payment. One couple actively pictured their dream house before making a big purchase and asked themselves if they really needed the item or not. Another couple bought a triplex and was able to rent out the other two units, bringing their monthly housing expenses to zero. Another couple lived with a relative for eight months and was able to save an additional $20,000 to their down payment.
If you are interested in understanding how buying a home fits into your financial planning, contact us at 515-557-1860 or email us at email@example.com. TABER Asset Management is a fiduciary, investment management and financial planning firm serving clients from across the U.S.