Why Millennials And Gen Z Struggle To Buy Homes | Well Spent | Business Insider

About this video

• Video Title: Why Millennials And Gen Z Struggle To Buy Homes | Well Spent | Business Insider
• Channel: Business Insider
• Speakers: Katie Natoulos, Emily Stewart, James Rodriguez, Amanda Pendleton
• Duration: 00:41:26

Overview

This video discusses the significant challenges millennials and Gen Z face in purchasing homes, exploring the reasons behind the current affordability crisis, different housing markets across the country, the buy vs. rent debate, and offers tips for young homebuyers.

Key takeaways

• Record High Home Prices: The national median home price has reached a historic high of $435,300, driven by a decade-long housing shortage and increased demand from millennials entering their prime home-buying years.
• Rising Mortgage Rates: Mortgage rates have significantly increased, adding hundreds of dollars to monthly payments compared to the pandemic era, further exacerbating affordability issues.
• Regional Market Variations: Sun Belt states experienced significant building and migration during the pandemic, leading to some market corrections, while the Northeast and Midwest remain tight markets due to limited new construction.
• Changing Buy vs. Rent Calculus: The break-even period for buying versus renting has lengthened significantly, making renting a more viable long-term option for many, especially in high-cost urban areas.
• Creative Homebuying Strategies: Younger buyers are increasingly relying on financial gifts, down payment assistance, co-buying with family or friends, and house hacking (renting out parts of their home) to enter the market.
• The "Starter Home" Dilemma: The lack of starter homes and the need to stay in a home longer to make the purchase financially viable are turning starter homes into de facto "forever homes."
• Boomer Gridlock: Baby boomers are aging in place and not moving as much, contributing to a lack of inventory, especially for entry-level homes, which intensifies competition.
• Financing First: It's crucial for young buyers to prioritize securing financing and understanding their mortgage options before falling in love with a specific property to avoid disappointment and potentially poor financial decisions.