- Gen Zers It’s difficult to buy a home as the cost of home ownership continues to increase, and as many people flood the debt associated with student loans, credit cards and purchase salary payments. According to the National Association of Realtors, only 3% of homeowners in the United States are Z.
Buying a home has long been the American dream. This is a sign of financial stability and is often considered one of the final investments that can be made.
But finding out that most of the Zers’ white smoke fences are out of reach, they have now paid off their personal debts, putting this generation behind home ownership. realtor.com.
According to a young man, the young man just wants to pay off his debt Report PYMNTS intelligence through payment data provider. On average, Gen Zers bears more than $94,000 in personal debt, a Newsweek polling Performances, far exceeding millennials, with debt of nearly $60,000 and a generation x The debt is about $53,000. Part of the struggle is that Zers pays monthly rents, with little down payments.
About one-third of Zers said they are underwater financially underwater due to inflation, high interest rates and stagnant wages, Natalia BrownChief Compliance and Consumer Affairs Officer National debt relief,Tell wealth.
“Many (Gen Zers) are entering adulthood with a heavy financial burden –Student LoansBrown said credit card debt and living costs have risen. Their debt feels heavier because it hits earlier, just as they start their careers. ”
“join in credit card,,,,, Medical expensesand Purchase – Paid Service Nowthe result is a dangerous snowball effect. ” she added.
The actual cost of home ownership
according to National Association of Real Estate Brokers (NAR), Gen Zers accounts for only 3% of all home buyers. This may not be surprising considering that mortgage rates are still relatively high, close to 7%.
at the same time, House prices in the United States far exceed,according to Harvard University Joint Center for Housing Research. Median house prices currently exceed $403,000, NAR data Showcase, while the Social Security Administration Report The national average wage index is about $66,600.
Assuming today’s mortgage rate, 20% down payment and national average salary, that would be It’s essentially impossible Buy a median home without spending more than one-third of your monthly income.
Nikki Beauchamp,and Sotheby’s International Real Estate In New York City, it is said that high interest rates are the main preventive factor for Zers Gen to be able to buy real estate.
“The cost of a house is much higher than that of previous generations, Maybe there aren’t as many starter houses Built or available,” Boschon told wealth. “Plus with the loan debt of students, overall, my observation is that their debt is much higher than my generation (Gen X) at that age.”
Suggestions for Zers who want to own a house
although More and more debt It can feel overwhelming and home ownership is out of reach, and there are a variety of ways to organize how you can pay your debt.
Financial advisors recommend paying off high-interest debts such as credit cards first, as many of them have interest rates above 25%, which may make paying off nearly impossible. Budget around other debts, such as student loans and car payments, is easier Elizabeth Schleifera financial consultant Armstrong, Fleming and Moore,Tell wealthadd a good rule of thumb, that the total monthly debt should be less than 36% of total monthly income.
“Look at your existing debt and determine how much space (if any) you have to pay for your mortgage,” Schleifer said. “If your debt level is already too high, your only focus should be on paying back those expenses.”
The consultant also advises that Z Gen Gen avoids buying and paying as much as possible for services as it can lead to “Small, repeat purchase trap This adds up. ” Brown said.
Beauchamp also reminds Zers that Gen Zers has several other ways to enter the housing market in addition to traditional ownership.
“Real estate has many different arrangements, including co-ownership, Fraction ownership This can be interesting for those who want to start climbing the property ownership ladder. ” she said.
This story was originally fortune.com
