Gen Z and Millennials Are Avoiding High Interest Rates — But It Can Be Risky, Real Estate Expert Warns The typical age to purchase a first home is 36 — the oldest ever on record.
By Amanda Breen Edited by Jessica Thomas
Key Takeaways
- High mortgage rates and home prices mean a tough market for young buyers.
- Still, those who can afford it might regret sitting on the sidelines for too long.
Mortgage rates have skyrocketed in recent years, reaching their highest levels in more than two decades last October at a 7.9% average contract rate for a 30-year fixed-rate mortgage, Reuters reported.
Although rates have come down slightly since then, home prices remain high, per CNN Business. It's a frustrating predicament for many Americans, 39% of whom frequently feel like they're stuck living where they are, according to a new poll commissioned by Built and conducted by Talker Research.
Forty-eight percent of Americans don't own a home, according to a study conducted by personal finance company Intuit Credit Karma earlier this year. Thirty-six percent of them rent — and 11% of them live at home with their parents or other family members.
What's more, the youngest would-be homebuyers are among some of the hardest hit. Those born between 1981 and 1996 have been called the "unluckiest generation," as they've witnessed the slowest economic growth of any age group since entering the workforce, The Washington Post reported.
Now, the typical age to purchase a first home is 36 years old — the oldest ever on record, per CBS News.
So, not surprisingly, it's many younger Americans who continue living at home: That 11% figure spikes to 31% for Gen Z respondents, according to Intuit's survey.
Additionally, a significant number of those who do live outside family homes and pay rent aren't optimistic about doing so long term; 30% of millennials and 27% of Gen Z say they can no longer afford their rent.
Even young Americans with greater financial resources might be hesitant to enter the real estate market amid high interest rates and home prices, but the waiting game doesn't always pay off either.
"If you wait for rates to fall, you could face higher home prices or miss out on your dream home," Shelly Henderson, co-founder of full-service real estate firm Henderson Properties and author of Starting from Scratch: One Woman's Pursuit of Family, Business and the American Dream, says.
"Rather than waiting for rates to fall, it may be a wise choice to purchase your home now and consider refinancing later," she adds. "The house will be with you a lot longer than the interest rate."
