Ricky Estera

"5 Reasons Why Now is a Good Time for Millennials and Gen Z to Buy a Home"

Are you thinking about buying a home but not sure if it's worth the investment in today's rising market? You're not alone. Many potential buyers, especially millennials and Gen Z, feel priced out of the market. However, a recent survey found that 65% of millennials view homeownership as a top sign of success, even surpassing a successful career, retiring, or having children.

One reason why now might be a good time to buy is that the cost of renting is higher than ever with no return on investment. According to the National Association of Realtors, millennials currently make up 43% of homebuyers, the most of any generation. However, with home sales facing a slowdown and potential homebuyers debating their next move this upcoming spring, it's important to consider the facts.

1. Rent is Aggressively Rising: Inflation is causing prices to increase across the board, including rent. In August 2021, the average monthly rent in the United States was $2,090, a 12.3% increase from the previous year. This is a significant difference from the start of the pandemic, when the national average was $1,660. The rise in rents is due to high demand and low supply, partly because businesses are buying up properties and landlords are raising prices to match costs. In fact, 72% of landlords plan to increase the rent on one or more properties within the next year.

2. Homeownership Builds Wealth: Did you know that homeowners actually have a higher net worth? According to KCM, the average household net worth for homeowners in 2022 was $300,000, compared to renters with $8,000. When you invest in property that appreciates in value, every monthly payment on the property will come back to you in the form of equity. In contrast, when you make monthly payments to your landlord, that money is gone forever. Investing in your property acts as a forced savings mechanism where you build equity as you pay down the mortgage.

3. Make a Deal That Doesn't Break Your Budget: Buying a home for the first time can be complex, with jargon, negotiations, and legal paperwork to navigate. It's important to work with an expert that you trust, from preapproval to closing. There are ways to get an affordable interest rate, such as through a mortgage buydown, and you might not need as large of a downpayment as you initially thought. 

In summary, rising rents, the opportunity to build wealth through homeownership, and the possibility of finding an affordable deal make now a good time for millennials and Gen Z to consider buying a home. If you're ready to take the next step, let's talk.