70% of Gen Z Believes Home Ownership out of Reach

Housing prices are coming down from their astronomical highs, but it may not be enough.

Earlier this week, Corelogic released its monthly U.S. home price insights, analyzing the housing market through January of this year and forecasting through January 2024. Nationwide, single home prices rose 5.5%, representing the slowest annual gain since June 2020. Corelogic predicted the pace will continue to slow through 2023, with a 3.1% year-over-year increase.

While home prices drifting slowly down is good news, continued challenges for first-time buyers in the coming year remain. Mortgage rates are again climbing above 7%, with the Fed hinting at more increases to come at an effort to curb inflation.

These hard numbers correspond with the findings reflected in the PYMNTS report, “Consumer Inflation Sentiment: Rising Housing Costs Deflate Economic Optimism,” where consumers’ hope for homeownership is dropping.

for s

The 7% decrease in consumers’ belief that buying a home is possible across age demographics has hit Generation Z hardest. Whereas 35% believed homeownership was within reach in January 2021, just 29% believed so in January 2023.

The reality of owning a home may take longer than many first-time buyers hoped. However, there may be some comfort in remembering that like other economic cycles, historically the housing market evens itself out and rates will return to normal. During the wait, consumers who are still holding on to the homeownership hope may explore some tools that have come to market assisting with these goals.

Real estate platform giant Zillow has had a service in place to help with down payments since 2021, particularly for first-time buyers, in a partnership with Down Payment Resource. Zillow’s listings have since included down payment assistance information, which produces a list of programs after prospective buyers input their data. Market competitor Redfin also announced a partnership with Down Payment Resource last year, helping potential homebuyers connect with 2,200 assistance programs.

Some smaller players are also trying to help with the process once the market becomes more accessible. Homebuying platform startup Gravy is hoping to both educate renters on the home purchasing process as well as give them a space to save toward that goal. Members can also earn through their rewards program and are connected with real estate agents and lenders when they’re ready to buy.

To better understand loan options, FinTech Opendoor launched a mortgage pre-approval app. Processing thousands of data points, it can determine the maximum home purchase price a qualifying buyer can afford and the minimum down payment for available loan options.