Gen Z needs to start saving now
If members of Generation Z want to own a home, they need to start saving today. According to new data, Gen Zers need to save more than $300 a month to buy a house by age 30.Verify your new rate (Nov 27th, 2020)
Start saving up
According to new data from Realtor.com, Generation Zers need to save $304 a month — starting now — if they want to buy a home by the time they’re 30.
That would cover a 10 percent down payment plus closing costs on a median-priced house, which Realtor.com projects will clock in at just over $386K. (That’s in 2031 when the youngest members of Gen Z turn 30.)
If Gen Zers are willing to settle in the Midwest or South, they can get away with saving even less. In Youngstown, Ohio, saving just $108 per month can put a home purchase within reach. In McAllen, Texas, it takes just $111, and in Toledo, Ohio, $141.Verify your new rate (Nov 27th, 2020)
Significantly more savings
If Gen Zers want to live in costlier metros, they’ll have to save up a lot more. Buying a home in San Jose, California, for example, will require saving $1,962 each month, while San Francisco means $1,439 a month. Other cities that require super-savings include Los Angeles, Honolulu and Oxnard, California.
Still, it’s not impossible to buy in these cities — and low-down payment mortgages can help, too.
“Choosing to live in one of the U.S.’s larger and more expensive metros, especially on the West Coast, is going to make homeownership a difficult task, but that doesn’t mean that Gen Z should give up on their dreams,” said Danielle Hale, chief economist for Realtor.com. “The most important thing they can do is start saving as much as possible early on and let compound interest do the heavy lifting for them. They may also want to consider more affordable areas or different down payment amounts.”
Get today’s mortgage rates
Have the cash to buy a home now? Then shop around and see what mortgage rates you qualify for today.Verify your new rate (Nov 27th, 2020)