In 2024, American millennials will experience an uphill struggle to realize the dream of owning their own home

Experts indicate that no substantial changes are expected in the real estate market before 2025 (Illustrative Image Infobae)

Millennials and Generation Z faced severe challenges entering the real estate market in 2023, and projections for 2024 show no signs of improvement. According to the consensus of real estate industry experts, challenges such as accumulating a down payment, relatively high mortgage rates and high home prices remain major obstacles. Despite the desire to own a home, economic reality poses significant barriers to these generations.

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Andrew Spieler, distinguished professor at Hofstra University’s Frank G. Zarb School of Business, told Fortune that market trends have not been favorable to young people for a long time and he expects the housing market won’t see major changes before of 2025. the tide has been against them for a long time,” Spieler said.

The specialist added that although mortgage rates reached peaks of 8% in October and home prices have increased since January, sellers do not react immediately to these changes and may need time to adjust prices.

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The creative strategies have been embraced by potential Millennial and Gen Z buyers, who have taken on side jobs and included money on wedding gift lists to finance down payments on their homes.

Assuming the average home price is $350,000, you would need $70,000 for the traditional 20% down payment. According to Amanda Pendleton, personal finance expert at Zillow Home Loans, and Nicole Bachaud, senior economist at Zillow, 60% of first-time buyers used at least two sources to finance the down payment, including savings and gifts from family or friends .

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Beatrice de Jong, a brokerage associate at The Beverly Hills Estates in Los Angeles, told Fortune that nearly all of her young clients receive financial help from their families to purchase a home, either by making the down payment, co-signing loans or assisting with monthly mortgage payments. Additionally, she noted that she has seen an increase in household participation in home purchasing like never before.

Most young clients of The Beverly Hills Estates need family financial assistance (Illustrative Image Infobae)

With mortgage rates expected to remain in the 6% range through 2024, millennials and Gen Z will need to continue to look for creative and realistic approaches to purchasing their first home, such as opting for condos given the high cost of houses with traditional characteristics of the suburbs according to De Jong.

“There’s a lot more family involvement than I’ve ever seen before. “People are simply forced to be more realistic about what they can afford,” the financial expert said.

2023-12-28 19:22:00
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