SANTA CLARA, Calif.,
Jan. 31, 2019 /PRNewswire/ -- Nearly
80 percent of Generation Z wants to own a home before age 30, and a
new analysis released today by realtor.com®, The Home of
Home Search℠, shows they will need to save $304 every month for the next 12 years to buy
with a 10 percent down payment plus closing costs on a median
priced home. According to the analysis, the median priced home in
the U.S. is projected to cost $386,310 in 2031, when today's 18-year-old
members of Generation Z turn 30.
The analysis, which includes a 13-year forecast for median home
prices in top 100 metros and different down payment savings plans,
projects Generation Z will need to save the most to purchase a home
in San Jose, Calif. where they
will need to save $1,962 per month.
The next most expensive locale is San
Francisco ($1,439/mo.)
followed by Los Angeles
($979/mo.), Honolulu ($946/mo.), and Oxnard,
Calif. ($877/mo.). According
to realtor.com®'s analysis of Optimal Blue mortgage
data, in 2018 the typical under-30 home buyer used a seven percent
down payment to successfully complete their home purchase. On
average, in the top 10 most expensive metros, members of Generation
Z will need to save an average of $948 a month, starting on their 18th birthday, to
afford a 10 percent down payment and typical closing costs by the
time they turn 30 years old.
The median priced home in 2019 is expected to cost $265,000, but over the course of the next 12
years, the price is expected to increase nearly 50 percent,
specifically another 46 percent to $386,310. This assumes prices grow at a very
modest 3.2 percent per year over the next 12 years.
"Choosing to live in one of the U.S.'s larger and more expensive
metros, especially on the West Coast, is going to make
homeownership a difficult task, but that doesn't mean that Gen Z
should give up on their dreams," said Danielle Hale, realtor.com®'s chief
economist. "The most important thing they can do is start saving as
much as possible early on and let compound interest do the heavy
lifting for them. They may also want to consider more affordable
areas or different down payment amounts. Some widely available
programs allow down payments as low as 3 percent, but a lower down
payment can mean higher ongoing monthly costs. As with most
decisions, there are pros and cons and a buyer needs to think these
through to determine what's best for them."
Midwest and South offer opportunities for an easier savings
plan
While the analysis reveals potentially daunting West
Coast future home prices and monthly savings amounts, Generation Z
can look to the Midwest and South for more affordable housing
options. Youngstown, Ohio, topped
the list of the most affordable metros, where Generation Z would
only have to save $108 per month. It
was followed by McAllen, Texas
($111/mo.), Toledo, Ohio ($141/mo.), Wichita,
Kan. ($154/mo.), and
Little Rock, Ark. ($156/mo.).
With an average median home price of $191,381 in 2031 for the top 10 most affordable
metros, an 18-year-old member of Generation Z will need to save an
average of $150 a month, starting on
their 18th birthday, to afford a 10 percent down payment by the
time they turn 30. That comes out to saving $798 a month less than the average monthly saving
required for the top 10 most expensive metros.
20 percent down payments paint a different
picture
While 10 percent down or less is far more common
among first-time and younger home buyers, some members of
Generation Z may want to use a 20 percent down payment to qualify
for a lower mortgage rate and have a much lower monthly payment,
but that might not be feasible in the nation's most expensive
metros. On average, for the 10 most expensive metros in the U.S.,
Generation Z will need to save $1,645
a month for a 20 percent down payment and closing costs. That is
$697 more every month than if they
are aiming to put 10 percent down. While 20 percent has
historically been the benchmark, this isn't true for first time
homebuyers, and Generation Z should consider varying levels of down
payments when planning to purchase a home, especially in higher
cost metros in the U.S.
Median Home Price
in 2031 and Monthly Savings Requirements to Afford a Down
Payment Plus Closing Costs
|
Geography
|
Median
Home Price
|
5% Down
Payment/mo.
|
10% Down
Payment/mo.
|
20% Down
Payment/mo.
|
United
States
|
$386,310
|
$191.96
|
$303.56
|
$526.76
|
San
Jose-Sunnyvale-Santa Clara, Calif.
|
$2,496,370
|
$1,240.44
|
$1,961.62
|
$3,403.99
|
San
Francisco-Oakland-Hayward, Calif.
|
$1,831,140
|
$909.89
|
$1,438.89
|
$2,496.90
|
Los Angeles-Long
Beach-Anaheim, Calif.
|
$1,245,750
|
$619.01
|
$978.90
|
$1,698.68
|
Urban Honolulu,
Hawaii
|
$1,204,240
|
$598.38
|
$946.28
|
$1,642.07
|
Oxnard-Thousand
Oaks-Ventura, Calif.
|
$1,116,660
|
$554.86
|
$877.46
|
$1,522.65
|
San Diego-Carlsbad,
Calif.
|
$1,095,530
|
$544.37
|
$860.86
|
$1,493.84
|
Bridgeport-Stamford-Norwalk, Conn.
|
$839,540
|
$417.16
|
$659.70
|
$1,144.78
|
Seattle-Tacoma-Bellevue, Wash.
|
$814,750
|
$404.85
|
$640.22
|
$1,110.97
|
Boston-Cambridge-Newton, Mass.-N.N.
|
$722,690
|
$359.10
|
$567.88
|
$985.44
|
New
York-Newark-Jersey City, N.Y.-N.J.-Pa.
|
$699,340
|
$347.50
|
$549.53
|
$953.60
|
Portland-Vancouver-Hillsboro, Ore.-Wash.
|
$664,810
|
$330.34
|
$522.40
|
$906.52
|
Stockton-Lodi,
Calif.
|
$628,400
|
$312.25
|
$493.79
|
$856.87
|
Sacramento--Roseville--Arden-Arcade,
Calif.
|
$618,900
|
$307.53
|
$486.33
|
$843.92
|
Washington-Arlington-Alexandria, D.C.-Va.-Md.-W.Va.
Metro
|
$609,410
|
$302.81
|
$478.87
|
$830.98
|
Denver-Aurora-Lakewood, Colo.
|
$603,490
|
$299.87
|
$474.22
|
$822.90
|
Riverside-San
Bernardino-Ontario, Calif.
|
$550,280
|
$273.43
|
$432.40
|
$750.35
|
Miami-Fort
Lauderdale-West Palm Beach, Fla.
|
$488,950
|
$242.96
|
$384.21
|
$666.72
|
Providence-Warwick,
R.I.-Mass.
|
$471,300
|
$234.19
|
$370.34
|
$642.65
|
Salt Lake City,
Utah
|
$456,770
|
$226.97
|
$358.93
|
$622.84
|
Fresno,
Calif.
|
$454,630
|
$225.90
|
$357.24
|
$619.92
|
Colorado Springs,
Colo.
|
$442,660
|
$219.96
|
$347.84
|
$603.60
|
Portland-South
Portland, Maine
|
$426,310
|
$211.83
|
$334.99
|
$581.31
|
Worcester,
Mass.-Conn.
|
$424,900
|
$211.13
|
$333.88
|
$579.38
|
Baltimore-Columbia-Towson, Md.
|
$417,290
|
$207.35
|
$327.90
|
$569.01
|
Hartford-West
Hartford-East Hartford, Conn.
|
$412,660
|
$205.05
|
$324.26
|
$562.69
|
North
Port-Sarasota-Bradenton, Fla.
|
$402,280
|
$199.89
|
$316.11
|
$548.54
|
New Haven-Milford,
Conn.
|
$396,680
|
$197.11
|
$311.71
|
$540.90
|
Richmond,
Va.
|
$392,170
|
$194.87
|
$308.16
|
$534.75
|
Austin-Round Rock,
Texas
|
$384,530
|
$191.07
|
$302.16
|
$524.34
|
Las
Vegas-Henderson-Paradise, Nev.
|
$378,240
|
$187.95
|
$297.22
|
$515.76
|
Minneapolis-St.
Paul-Bloomington, Minn.-Wis.
|
$376,980
|
$187.32
|
$296.23
|
$514.04
|
Madison,
Wis.
|
$374,210
|
$185.94
|
$294.05
|
$510.26
|
Bakersfield,
Calif.
|
$374,200
|
$185.94
|
$294.04
|
$510.25
|
Philadelphia-Camden-Wilmington,
Pa.-N.J.-Del.-Md.
|
$370,080
|
$183.89
|
$290.81
|
$504.63
|
Chicago-Naperville-Elgin, Ill.-Ind.-Wis.
|
$368,540
|
$183.13
|
$289.60
|
$502.53
|
Phoenix-Mesa-Scottsdale, Ariz.
|
$368,290
|
$183.00
|
$289.40
|
$502.19
|
Spokane-Spokane
Valley, Wash.
|
$362,310
|
$180.03
|
$284.70
|
$494.04
|
Raleigh,
N.C.
|
$361,990
|
$179.87
|
$284.45
|
$493.60
|
Charleston-North
Charleston, S.C.
|
$361,520
|
$179.64
|
$284.08
|
$492.96
|
Durham-Chapel Hill,
N.C.
|
$360,550
|
$179.16
|
$283.32
|
$491.64
|
Virginia
Beach-Norfolk-Newport News, Va.-N.C.
|
$359,290
|
$178.53
|
$282.33
|
$489.92
|
Orlando-Kissimmee-Sanford, Fla.
|
$358,860
|
$178.32
|
$281.99
|
$489.33
|
Jacksonville,
Fla.
|
$355,540
|
$176.67
|
$279.38
|
$484.81
|
Milwaukee-Waukesha-West Allis, Wis.
|
$351,010
|
$174.42
|
$275.82
|
$478.63
|
Boise City,
Idaho
|
$348,280
|
$173.06
|
$273.67
|
$474.91
|
Dallas-Fort
Worth-Arlington, Texas
|
$346,820
|
$172.33
|
$272.53
|
$472.92
|
Tucson,
Ariz.
|
$341,800
|
$169.84
|
$268.58
|
$466.07
|
Springfield,
Mass.
|
$341,630
|
$169.75
|
$268.45
|
$465.84
|
Cape Coral-Fort
Myers, Fla.
|
$337,680
|
$167.79
|
$265.35
|
$460.45
|
Nashville-Davidson--Murfreesboro--Franklin,
Tenn.
|
$335,030
|
$166.48
|
$263.26
|
$456.84
|
Albany-Schenectady-Troy, N.Y.
|
$333,560
|
$165.74
|
$262.11
|
$454.83
|
Allentown-Bethlehem-Easton, Pa.-N.J.
|
$332,160
|
$165.05
|
$261.01
|
$452.93
|
Tampa-St.
Petersburg-Clearwater, Fla.
|
$326,780
|
$162.38
|
$256.78
|
$445.59
|
Houston-The
Woodlands-Sugar Land, Texas
|
$313,220
|
$155.64
|
$246.13
|
$427.10
|
Albuquerque,
N.M.
|
$303,470
|
$150.79
|
$238.46
|
$413.80
|
Palm
Bay-Melbourne-Titusville, Fla.
|
$302,990
|
$150.55
|
$238.09
|
$413.15
|
New Orleans-Metairie,
La.
|
$302,980
|
$150.55
|
$238.08
|
$413.14
|
San Antonio-New
Braunfels, Texas
|
$296,390
|
$147.28
|
$232.90
|
$404.15
|
Charlotte-Concord-Gastonia, N.C.-S.C.
|
$293,620
|
$145.90
|
$230.72
|
$400.37
|
Atlanta-Sandy
Springs-Roswell, Ga.
|
$289,810
|
$144.01
|
$227.73
|
$395.18
|
Deltona-Daytona
Beach-Ormond Beach, Fla.
|
$289,500
|
$143.85
|
$227.49
|
$394.76
|
Birmingham-Hoover,
Ala.
|
$283,380
|
$140.81
|
$222.68
|
$386.41
|
Kansas City,
Mo.-Kan.
|
$283,000
|
$140.62
|
$222.38
|
$385.89
|
Baton Rouge,
La.
|
$273,510
|
$135.91
|
$214.92
|
$372.95
|
Columbus,
Ohio
|
$272,020
|
$135.17
|
$213.75
|
$370.92
|
Grand Rapids-Wyoming,
Mich
|
$265,840
|
$132.09
|
$208.89
|
$362.49
|
Lakeland-Winter
Haven, Fla.
|
$265,310
|
$131.83
|
$208.48
|
$361.77
|
Detroit-Warren-Dearborn, Mich
|
$265,040
|
$131.70
|
$208.27
|
$361.40
|
St. Louis,
Mo.-Ill.
|
$258,870
|
$128.63
|
$203.42
|
$352.99
|
Des Moines-West Des
Moines, Iowa
|
$258,700
|
$128.55
|
$203.28
|
$352.76
|
Knoxville,
Tenn.
|
$258,220
|
$128.31
|
$202.91
|
$352.10
|
Omaha-Council Bluffs,
Neb.-Iowa
|
$254,040
|
$126.23
|
$199.62
|
$346.40
|
Harrisburg-Carlisle,
Pa.
|
$252,780
|
$125.61
|
$198.63
|
$344.68
|
Memphis,
Tenn.-Miss.-Ark.
|
$251,170
|
$124.81
|
$197.37
|
$342.49
|
Chattanooga,
Tenn.-Ga.
|
$247,880
|
$123.17
|
$194.78
|
$338.00
|
Greensboro-High
Point, N.C.
|
$247,630
|
$123.05
|
$194.59
|
$337.66
|
Columbia,
S.C.
|
$246,090
|
$122.28
|
$193.38
|
$335.56
|
Indianapolis-Carmel-Anderson, Ind.
|
$245,850
|
$122.16
|
$193.19
|
$335.24
|
Cincinnati,
Ohio-Ky.-Ind.
|
$245,380
|
$121.93
|
$192.82
|
$334.59
|
Buffalo-Cheektowaga-Niagara Falls, N.Y.
|
$241,970
|
$120.23
|
$190.14
|
$329.94
|
Louisville/Jefferson
County, Ky.-Ind.
|
$239,440
|
$118.98
|
$188.15
|
$326.49
|
Rochester,
N.Y.
|
$237,220
|
$117.87
|
$186.41
|
$323.47
|
Greenville,
N.C.
|
$236,380
|
$117.46
|
$185.75
|
$322.32
|
Jackson,
Miss.
|
$234,010
|
$116.28
|
$183.88
|
$319.09
|
Tulsa,
Okla.
|
$232,540
|
$115.55
|
$182.73
|
$317.09
|
Augusta-Richmond
County, Ga.-S.C.
|
$231,870
|
$115.22
|
$182.20
|
$316.17
|
Syracuse,
N.Y.
|
$230,110
|
$114.34
|
$180.82
|
$313.77
|
El Paso,
Texas
|
$226,170
|
$112.38
|
$177.72
|
$308.40
|
Cleveland-Elyria,
Ohio
|
$224,970
|
$111.79
|
$176.78
|
$306.76
|
Winston-Salem,
N.C.
|
$224,580
|
$111.59
|
$176.47
|
$306.23
|
Pittsburgh,
Pa.
|
$223,740
|
$111.18
|
$175.81
|
$305.09
|
Oklahoma City,
Okla.
|
$220,200
|
$109.42
|
$173.03
|
$300.26
|
Dayton,
Ohio
|
$209,060
|
$103.88
|
$164.28
|
$285.07
|
Scranton--Wilkes-Barre--Hazleton, Pa.
|
$204,930
|
$101.83
|
$161.03
|
$279.44
|
Akron,
Ohio
|
$204,110
|
$101.42
|
$160.39
|
$278.32
|
Little Rock-North
Little Rock-Conway, Ark.
|
$198,070
|
$98.42
|
$155.64
|
$270.08
|
Wichita,
Kan.
|
$195,910
|
$97.35
|
$153.94
|
$267.14
|
Toledo,
Ohio
|
$179,850
|
$89.37
|
$141.32
|
$245.24
|
McAllen-Edinburg-Mission, Texas
|
$140,980
|
$70.05
|
$110.78
|
$192.24
|
Youngstown-Warren-Boardman, Ohio-Pa.
|
$136,960
|
$68.05
|
$107.62
|
$186.76
|
Methodology: This analysis assumed an 18-year-old member
of Generation Z started saving on his or her birthday, contributing
the exact amount every month into a savings account with a fixed
three percent annual return, compounded monthly. They will make
their home purchase in 2031 on their 30th birthday, after making
exactly 144 deposits over exactly 12 years. The calculated savings
amount required includes money for a downpayment and typical
closing costs of about 3.6 percent for first-time home buyers.
Forecast median home price data comes from Moody's Analytics
(economy.com).
About realtor.com®
Realtor.com®, The Home of Home Search℠, offers an
extensive inventory of for-sale and rental listings, and access to
information, tools and professional expertise that help people move
confidently through every step of their home journey. It pioneered
the world of digital real estate 20 years ago, and today is the
trusted resource for home buyers, sellers and dreamers by making
all things home simple, efficient and enjoyable.
Realtor.com® is operated by News Corp [NASDAQ: NWS,
NWSA] [ASX: NWS, NWSLV] subsidiary Move, Inc. under a perpetual
license from the National Association of REALTORS®. For
more information, visit realtor.com®.
Media contact:
Cody Horvat at
cody.horvat@move.com
View original
content:http://www.prnewswire.com/news-releases/generation-z-needs-to-start-saving-304-a-month-now-to-buy-a-home-by-age-30-300787162.html
SOURCE realtor.com