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ECONOMIST TO
TEENS: "START
SAVING NOW"
Generation Z needs to start saving $304
a month now to buy a home by age 30,
according to an analysis by Realtor.com. e
homeownership success of this group will
largely depend on the location. Midwest
and South are considered regions with more
affordable options, it indicated.
e analysis titled "e Home of Home
Search" shows that nearly 80 percent of
Generation Z wants to own a home before
age 30. However, to make their dream of
homeownership a reality, they will have to save
$304 every month for the next 12 years to buy
with a 10 percent down payment plus closing
costs on a median-priced home.
Currently, the median price of a home in the
U.S. is projected to cost $386,310 in 2031, when
today's 18-year-old members of Generation
Z turn 30, the analysis pointed out. Realtor.
com's projections based on a 13-year forecast
for median home prices in top 100 metros and
different down payment savings plans reveal
that Generation Z will need to save $1,962 per
month will need to save $1,962 per month.
e next most expensive locale is San
Francisco at $1,439 followed by Los Angeles at
$979, and Honolulu at $946, and California at
$877 per month in terms of savings. According
to realtor.com's analysis of Optimal Blue
mortgage data, the typical under-30 home
buyer used a seven percent down payment to
successfully complete their home purchase in
2018. Starting on their 18th birthday, to afford
a 10 percent down payment and typical closing
costs in the top 10 most expensive metros by
the time they turn 30 years old, members of
Generation Z will need to save an average of
$948 a month.
e median-priced home in 2019 is expected
to cost $265,000, but over the course of the next
12 years, the price is expected to increase by
nearly 50 percent, according to Realtor.com.
Youngstown, Ohio, topped the list of the most
affordable metros, where Generation Z would
only have to save $108 per month, followed
by McAllen, Texas; Toledo, Ohio; Wichita,
Kansas; and Little Rock, Arkansas.
"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.e 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," said Danielle Hale, Chief
Economist at Realtor.com.
