Gen Z: Steps to Homeownership (Part I)

Gen Z is poised to be the largest source of homebuyers in the United States. The post-millennial generation, or those born after 1996, make up about 32 percent of the population. And, according to a recent report by realtor.com, 80 percent of them want to own a home before they turn 30.
 
For kids who are still in high school or just graduating from college, homeownership aspirations might seem far off. But the overwhelming attitude toward homeownership could have roots in the economic turndown their parents faced.
 
"Gen Z parents were Gen Xers and many Gen Xers went through the recession. It could be that they saw what their parents faced and they have a different take on owning a home," says Danielle Hale, chief economist at realtor.com.
 
Strong Job Market, Stagnant Wages
The good news is that this generation is graduating into a strong job market, Hale points out. The unemployment rate has stayed near the 4 percent mark for the last five months, while more than 300,000 jobs were added in January.
 
The bad news is that wages for recent college graduates are relatively flat, according to a report by Korn Ferry. Researchers analyzed salaries of 310,000 entry-level jobs in the U.S. from almost 1,000 organizations. They found that 2018 college grads would earn $50,390, a 2.8 percent hike from 2017.
 
For many Gen Zers, this mean preparing early to become homeowners at 31, which is the median age of first-time homebuyers. Saving for a down payment is part of the preparation. There programs available to first time home buyers who offer lower downpayment options (3 or 3.5 percent) or lock in a low interest rate.

Source: RISMEDIA/Natalie Campis