Why young professionals should buy a Boston condo
Boston Condos for Sale & Boston Apartments
Why young professionals should buy a Boston condo
With mounting student loan debt, many Gen Z have all but given up on the dream of purchasing their own Boston condo for sale. Even those who plan to buy a home someday lament that they may be well into their thirties before it ever happens.
WHY HOME OWNERSHIP MATTERS
The single most important reason for Gen Z to get in on home ownership is the building of wealth through real estate. Rental rates in the Boston housing market continue to out pace mortgages, meaning that Gen Z are overpaying significantly for living space, without gaining any of the equity that they would otherwise have with owned properties.
Over the course of a decade, this could mean paying nearly $200,000 in rent, instead of applying that money toward a mortgage. The problem gets even more extreme for Gen Z who wait until their mid-thirties to invest in residential properties. With the Boston housing marketing growing rapidly, it’s only going to become more competitive the longer you wait.
David Bach, a self-made millionaire, estimates that “the average home owner to this day is 38 times wealthier than a renter.” This number may seem extreme, but following a recent report from CNN Money that 26% of Americans have less than $1000 in savings for retirement, it may very well be the truth.
According to The College Investor, the average net worth of the oldest group of millennials who are now in their mid-thirties is right around $20,000. The median net worth of all Gen Z is closer to $10,000 thanks to overwhelming student loans dragging people downward.
BREAKING THE CYCLE
Part of the problem Gen Z currently face is a misunderstanding of the home buying process. With little knowledge of how to apply for a mortgage, manage their credit scores, or even determine their debt-to-income ratios, the process of buying a home seems hopelessly out of reach. If you’re interested in learning more about home buying process, we have more tips for Gen Z home buyers.
In addition, Gen Z who are already overpaying for rent see precious few opportunities to save up for a down payment, even if buying a home would free up more of their monthly income. Thus, it often takes a concerted effort to break out of the mold and purchase a home sooner rather than later.
Going forward, it appears that real estate values throughout Boston and much of the US will continue to rise. In addition, mortgage rates are set to increase, and Gen Z may miss out on the historically low rates if they don’t move fast. Before assuming that mortgage is out of question, Gen Z should speak with a lender about their options.
FIND THE RIGHT TEAM
Partnering with a Boston real estate agent can help you find your dream home while helping you find a lender that can help you with your finances. There are a variety of first time home buyer programs, and low down payment options that can make mortgages more affordable for Gen Z without a ton of cash up front.
Working with a qualified residential brokerage in Downtown Boston is a great way to find properties in your price range that meet your needs. You may be surprised to find how easy it is to locate your dream home and close a deal.
