In the Race to Homeownership, Gen Z Is Trailing Behind

A recent report by real estate technology firm Hommati revealed that 97% of Gen Zers eventually want to become homeowners, most before the age of 35. But in a housing market defined by fast-rising prices and a dwindling share of starter homes, first-time buyers are at a disadvantage. 

The biggest barrier to homeownership for young Americans isn’t the monthly mortgage but the exceedingly high down payment, which often surpasses $10,000 on the low end, Forbes reports. Luckily, a number of down payment assistance (DPA) programs can help first-timers not just afford that up-front cost but better manage their finances to cover housing costs down the line.

“The core benefits of homeownership haven’t changed over the decades, but their significance for young people, particularly in terms of long-term financial outcomes, has been magnified,” shares Rob Chrane, CEO of Down Payment Resource, a firm that helps match eligible buyers with homeownership assistance programs.

“The ‘best’ DPA could come down to how the assistance money can be used. Can it be used to cover closing costs so the buyer doesn’t have to rely on the seller to cover those and can thus make a more competitive offer on a contract? Can the funds be used to reduce the first mortgage interest rate? Reduce mortgage insurance costs? Cover pre-paids? Repairs on the new home? Eligible uses of funds could be the difference maker for some buyers,” he suggests.

Read more