Gen Z Housing Headlines Already Blowing Smoke


Millennials have long said “woe is us” in reaction to endless headlines claiming homebuying is out of reach. And let me be the first to welcome Gen Z to the pity party! just crunched some numbers on how much today’s 18 year olds would have to save to afford a home by the time they’re 30. If you take their report at face value, it’s a punch in the stomach.

Apparently, the average Gen Z-er* would need to save over $500 a month to afford a 20 percent down payment for the projected median home price on their 30th birthday.

Cue a flood of hopeless Snapchats and Instagram posts from a generation with #crushed housing hopes.


Not quite. Let’s dig in to find the truth.

Here’s how this report came to its conclusions:

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.

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.

The starting assumption goes with is that the median home will increase by almost 50% in 12 years. That assumes there won’t be a housing market correction or sustained dip, which could happen—12 years is a long time.

This is a big leap to make, so let’s start pouring on the grains of salt here.

Crucially, wages could grow in that 12 year time frame, so the idea of saving X amount per month could mean a totally different financial commitment in 2027 than it does in 2019.

On top of all this, not every buyer need to save 10% or 20% for a down payment. The report mentions that but the headline is still about a ridiculous potential savings plan. No teenager without rich parents has the capability to put away hundreds every month for years, so why lead with that if your goal is to offer actual financial advice?

Is the plan to scare these kids straight into saving?

Who knows. But here’s some actual advice.

If you’re 18 and want to own a home one day, yeah, go ahead and start saving. But don’t forget to be a kid!

If you have some money socked away, buy an Xbox or something. But while you have fun, you should do what I didn’t do. Practice some financial discipline and don’t get used to being broke if you can help it.

But remember the bulk of your earnings are way ahead of you, and your earnings later in your career will be so much more than whatever you’re making now.

If you can get used to living within your means now, though, setting up a good debt-to-income ratio so you can afford the home you want will be second nature.

And remember it’s not actually a pity party where you need to get all faded. It’s the headlines that are blowing smoke.
Generation Z Needs to Start Saving $304 a Month Now to Buy a Home By Age 30 (

*We need a better name for these kids who are age 4 to 24 in 2019. The Basis Point is now accepting suggestions.




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