- High prices and low inventory make it hard for young people to buy a home but not impossible.
- Four Gen Z homebuyers broke down how they financed their first home purchases.
- They saved money, improved credit, and applied for government programs for first-time homebuyers.
It’s getting harder and harder for young people to buy a home. Home prices and interest rates are on the rise while supply continues to dwindle.
Those factors, coupled with the financial strain of student debt, have left many unable to save enough for a down payment or afford a monthly mortgage.
But some are getting it done. From extreme-savings strategies to scoring a mortgage for 100% of the home price, four Gen Z homebuyers told Insider about the unique ways they financed their first home purchase before age 25.
While not all of their financial paths to homeownership are available to everyone, their journeys can serve as a guide and spark ideas.
Here are some tips from their first home purchases.
Daniel Greene, 22, stands in front of his new house in Vale, North Carolina. He purchased the house, built in 2019, for $212,800 last year and plans to live here with his fiancée when they’re married.
Courtesy of Daniel Greene
Saving for a down payment was ‘untenable.’ Instead, I looked for 100% financing options and plan to refinance later.
After Daniel Greene, 22, fled his tumultuous childhood home with his two sisters a few years ago, he wanted to buy a house to move into when he and his fiancée got married, he said.
But after putting all of his money towards rent — $1,250 per month — the 2020 college graduate didn’t have much saved to put toward a down payment on a house, he said.
“It’s the American dream. It’s something you’re supposed to do,” he said. “To be honest, though, it’s unattainable, it’s completely untenable.”
“How am I supposed to save up $20,000?” he added. “I don’t come from money.”
It’s a challenge facing his entire generation, said Greene, who works in finance making about $85,000 per year.
Through his bank, North Carolina’s State Employees’ Credit Union, he found a way to do so. He bought a new-construction two-bedroom home for the amount of his loan last year, he said.
The bank offered a floating-rate mortgage, with an initial interest rate of 3.14%, that lent on 100% of the $202,800 house. He had a credit score of 700 when he took out the loan, and the rate will be adjusted in two years.
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Source: https://www.businessinsider.com/how-to-buy-a-house-in-your-20s-gen-z-2022-3