Younger Americans who are looking for ways to buy a home in a challenging market are surprisingly open to buying a home with friends who aren’t their partner to make it more affordable as well as turning to their family for help making that investment.
High interest rates and limited housing supply have made it a tough market for buyers to find a house that meets their needs, but homeownership remains a top priority for 42% of Americans who don’t currently own a home, according to a survey by Credit Karma.
The survey found that over one-third of non-homeowners (35%) would be willing to split the purchase of a home with someone other than their partner – like a friend or a group of friends. That figure jumped to 59% among Gen Z respondents, highlighting younger Americans’ willingness to look at less traditional ways of buying a home.
“I think we’re just seeing young folks who maybe just feel that homeownership is absolutely not within their reach on one income, or maybe they’re partners looking for other ways to get in. There’s this new openness to other forms of ownership,” Courtney Alev, consumer financial advocate at Credit Karma, told FOX Business.
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“There are challenges or complications that might arise when you have several people going in on a property, of course, but I applaud the creativity and people looking for other ways to accomplish a goal,” she added.
“The silver lining of a lot of hard things going on in the economy is the realization that there’s not one path. People can take different paths and buying with friends might be another way.”
Younger homebuyers are also looking to save money for homeownership by cutting back on non-essential spending on things like travel and dining out (35%), working more hours (28%), postponing other major purchases (27%), or moving in with family (16%). At 35%, Gen Z respondents were the most likely to move in with family.
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Homebuying hopefuls also say they’re open to receiving financial assistance from their parents to make that dream a reality.
About 18% of overall respondents who have never bought a home said they plan to have their parents help them buy their first home. That figure jumped to 44% for Gen Z respondents, far higher than the 16% of Millennials and 12% of Gen X respondents who planned to do the same.
Among those who currently own a home or have previously owned a home, 19% respondents acknowledged that they received financial assistance from their parents – which was the case for 38% of Gen Z and 27% of Millennial homebuyers.
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Alev emphasized that Americans who want to buy a home but are feeling like it will remain out of reach for them should be patient and focus on doing things they can control to improve their financial well-being while also being aware that the current housing market challenges won’t last forever.
“For those who are really stressed out about getting into a home – try to focus on what you can control,” Alev suggested. “Make those lifestyle changes that you can just to be saving money to be more ready for when it happens. Make sure your credit score is in a good place.”
“Also, as hard as it can be, try not to get discouraged by market conditions. Interest rates are high right now, they were pretty low a couple of years ago, they’ll probably go lower at some point, and they’ll probably get higher again at some point,” she added. “There is a lot of unpredictability – what’s most important is that you make that move when you’re ready.”
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