Generation Z can’t afford a median home in any of the country’s 100 largest counties.
When it comes to the housing market, lack of affordability is a constant topic of discussion — you’re probably sick of hearing just how difficult it is for first-time buyers to break in and buy a home.
Unfortunately, there is a lot of truth to the situation as the number of cities where one can buy a home on an average salary keeps on dwindling. According to the latest study by real estate portal Point2 Homes, Generation Z currently can’t afford a median home in any of the country’s 100 largest counties.
Which Counties Are Affordable (Hint: Very Few)
By putting net income and housing costs side by side with the 30% number often cited as the minimum needed for a financially sound down payment, Point 2 Homes analysts found that those who are currently between 15 and 24 years old on average could only afford to spend as much as $561,074 on a home in San Francisco — but, as the median price is currently $1.295 million, that number is not even half of what is needed.
While home prices are obviously much lower in less expensive cities, similar income-price discrepancies mean that the youngest adult generation cannot afford a median home in any of the country’s 100 largest counties.
Point2 Homes
“From as much as $1 million to a little more than $40,000, the price difference between the median home and the home that Gen Zers can actually afford opens a not-so-metaphorical precipice between young people and their homeownership dreams,” the report said.
It Both Is And Isn’t Generational
This generation’s young age is an important factor in this number — most are still in college or, if pursuing a different professional path, still far from their prime earning years.
But while the situation will likely turn around for Generation Z, millennials aged between 25 and 44 also can’t afford a home in 66 out of the country’s largest counties. At 30, Generation X (people aged between 45 and 64) are currently in the best position while Baby Boomers are rapidly sliding into a similar affordability problems — if those over 65 have not yet bought a home, they’ll find that buying one will be unaffordable in 89 of the country’s 100 largest counties.
While “median” numbers often obfuscate the reality of the situation (many young people are inheriting, receiving down payment help or living with parents to save up while the Baby Boomer situation has low affordability simply because many have already retired), the situation that’s coming out is pointing toward a challenging future — far from being exclusive to expensive cities like New York or San Francisco, housing affordability is a problem that spans both geography and generations.
“Clearly, young professionals who want to buy property need to look far and wide (and settle for smaller homes) because the results are clear: Gen Z can’t afford the median home in any of the 100 largest counties,” reads the report.
