A recent Bank of America poll found that 53% of Generation Z felt inflation prevented them from financial success despite expenditure cuts.
Bank of America Retail Banking President Holly O’Neill said the younger generation has coped with financial hardship and adjusted their habits.
Because of rising costs of housing and costs of living, approximately seventy-three percent of Gen Zers changed their behaviors to spend less on food and fuel. Even if inflation slows and pricing pressures drop, those who embraced these new spending practices expect to keep them next year.
According to Zillow home trends specialist Amanda Pendleton, mortgage rates have risen since last year, raising monthly housing expenses by $431. Younger generations are concerned about how they’ll afford a house due to increasing rates and record-high housing values.
High mortgage rates and little property availability trap many first-time homebuyers. According to Redfin, 12% of Gen Z think they will never buy a house due to these mortgage rates and housing costs.
Freddie Mac reports median house selling prices have grown 40% since 2019, while mortgage rates have soared to over 8%.
Other affordability issues prevent young Americans from becoming homeowners, such as preparing for a deposit and closing costs. According to Redfin, 33% of Gen Z indicated it’s hard to put away money for a down payment. They are also paying college loans. 21% said they had to repay college loans before purchasing a property.
First-time homebuyers are overcoming these obstacles to homeownership. According to Redfin, 41% of Gen Z have additional jobs to earn money for their down payment, and 25% will utilize a financial gift from relatives.
Some have pondered paying off their mortgages and liabilities. A buyer buys a property to rent rooms long-term or short-term.
A report shows that “Co-Buying” is a growing trend among young purchasers, allowing them to split the expenses of purchasing a property. Friends and family might pool their money for a down payment and other closing fees when buying a home together. It’s an excellent approach to divide the heavy financial burden of things like mortgages, essential services, and repairs.
A recent poll by Zillow found that among Generation Z members who do not already own a house, 52% feel they need to be lottery winners to purchase one.