By: De’Jah Seabrooks, Follow South Jersey Intern
According to National Association of Realtors, the average first time homeowner in 2023 was 35, however, that shouldn’t stop you from considering purchasing a home before that age.
Being a homeowner has its fair share of responsibilities from yard work to no longer relying on maintenance to fix a leaky pipe. A motivating factor that seems to be on the rise impacting Gen Z’s and Millennials’ decision to buy a home is the volatile nature of the housing market throughout the country. Some feel slighted as the home buying process is drastically different from those just a few generations older.
Studies from Census.gov show that the median house price in 2010 was about $175,000, almost a third of today’s prices for a house of the same size. Inflated house prices are one of the sole factors that are contributing to the hardships of purchasing a home for many Gen Z.
The main challenges Gen Z is facing when it comes to purchasing a home vs renting an apartment in today’s housing market are
Affordability: Rising home prices coupled with stagnant wages make it difficult for Gen Z to save for a down payment and qualify for a mortgage.
Inventory: Investors buying multiple properties and limited availability of starter homes create a competitive market with fewer options.
Inflation: The overall increase in prices makes houses significantly more expensive compared to previous decades. This can be seen from studies by PRN news
Between skyrocketing home prices and the average student loan debt, saving for a down payment is a daunting task. This is further amplified by the lack of inventory, particularly starter homes that are ideal for first-time buyers, as well as investors who have the backing to purchase some of the more affordable homes or fixer-uppers and rent them out for profit.
The fierce competition in a seller’s market often leads to bidding wars, driving prices even higher and pushing potential Gen Z buyers out of the market, and the national trends are making it difficult for Gen Zers to buy a house.
Affordability is a major obstacle for Gen Z as the average price of a house in today’s national market is roughly $390,000. For Jersey residents this number is even higher ranging at close to $500,000. New Jersey presents a unique set of challenges for Gen Z homebuyers outside of the increased median house price. Property taxes are at some of the highest rates in the nation, adding to the financial burden of owning a home in New Jersey.
While still expensive compared to the national average, South Jersey offers a slightly more affordable housing market compared to North Jersey. Some areas in South Jersey have programs in place to assist first-time buyers with down payments and closing costs, making it much more accessible to those who are just starting out in the housing market.
Gen Z shouldn’t be deterred from pursuing homeownership throughout all of New Jersey. Conducting thorough research into first-time buyer programs and exploring various areas, particularly within South Jersey, can equip Gen Z with the knowledge and options necessary to navigate the competitive housing market. Camden County specifically has a program that would give eligible homebuyers up to $25,000 to put towards buying their first home according to the Camden County site.
Despite economic hurdles, Gen Z aspires to homeownership. Their financial literacy and digital savvy can empower them to navigate the housing market and become successful homeowners. By leveraging technology and utilizing home ownership grants that help affordability, Gen Z can turn the dream of homeownership into a reality.
Their home purchases will revitalize neighborhoods and contribute to a stronger housing market for all to come in the future.
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