Gen Z is entering the housing market during one of the most difficult affordability periods in decades. Rising home prices, higher interest rates, and limited inventory have led many first-time buyers to wonder: When will owning a home become truly feasible?
This blog explains what the next five years might look like — and how North American Savings Bank (NASB) can help Gen Z buyers get into a home sooner than they expect.
Why Gen Z Is Struggling with Home Affordability
- Home prices surpassed income. From 2020 to 2024, home prices rose by over 40%, while wages lagged behind. A typical starter home now requires a higher income than most early-career Gen Z buyers earn.
- Mortgage rates almost doubled. Rates increased from approximately 3% to around 7%, resulting in monthly payment increases of 60–70%. Even if prices level off, payments stay high.
- Debt and living expenses limit savings. Student loans, rent increases, and inflation make saving for a down payment more challenging.
- Low inventory keeps prices high. Even with softer demand, the shortage of homes continues to support prices.
So, When Will Gen Z Be Able to Afford a Home?
2025–2026: Gradual Improvement
Most forecasts call for:
- Slowing the growth of home prices
- Potentially small rate decreases
- Steady wage growth
Affordability may improve slightly, but not significantly.
2027–2028: Better Alignment Between Incomes and Prices
As more Gen Z earners reach peak early-career income levels (28–32), affordability improves. Additional new-construction inventory could help stabilize prices.
2029–2030: Strongest Opportunity Window
Many analysts anticipate:
- Moderate rates
- More inventory from downsizing boomers
- Higher Gen Z wages
This period may present the most favorable conditions Gen Z buyers have experienced.
The Bottom line
Most Gen Z buyers will notice significant affordability improvements between 2027 and 2030.
But many can buy earlier with the right mortgage strategy.
How Gen Z Can Afford a Home Sooner
1. Use Low Down-Payment Options
Gen Z buyers often believe they need a 20% down payment, but NASB provides many alternatives that require significantly less.
- Conventional loans with as little as 3% down
- FHA loans starting at 3.5% down
- VA loans with 0% down for eligible borrowers
- Bank Statement Loans available with as little as 10% down and mortgage insurance for buyers with non-traditional income.
These programs help buyers enter the market faster.
2. Lower Payments with Buydown Strategies
To make early-career homeownership possible, many buyers use:
- 2-1 temporary rate buydowns
- Permanent rate buydowns
- Adjustable-rate mortgages (ARMs) with refinance opportunities
NASB loan officers help buyers compare options aligned with their long-term plans.
3. Use Flexible Income Documentation (Great for Gig or Self-Employed Gen Z)
Many Gen Z professionals earn income through:
- Freelancing
- Contract work
- Gig platforms
- Creator/online revenue
NASB specializes in Non-QM and alternative documentation programs that recognize non-traditional income streams.
4. Look Just Outside Major Metros
Widening the search radius by 15–30 minutes can lower home prices by 20–40%. This is one of the quickest ways to improve affordability.
5. Focus on Starter Homes First
Buying a smaller or older home helps build equity for future upgrades. Gen Z doesn’t need the “forever home” first — the goal is to enter the market.
Should Gen Z Buy Now or Wait?
There’s no one-size-fits-all answer. Consider buying sooner if:
- Your job and income are stable
- You can comfortably afford the payment
- You expect to stay in the home for at least 3+ years
- You want to build equity instead of paying rising rent
Waiting may be better if:
- Your income is unstable
- Your credit needs improvement
- You expect a significant life change soon
A NASB loan officer can help run the numbers to determine the best timing based on your financial goals.
The Bottom Line
Gen Z will likely see the most significant improvements in affordability between 2027 and 2030.
But with low-down-payment options, flexible income documentation, and innovative rate strategies, many Gen Z buyers can purchase a home well before that window.
NASB is here to help first-time buyers navigate the market confidently and find the right home loan solution.
Ready to Explore Your Options?
Whether you want to understand your buying power, compare loan programs, or create a path toward homeownership, NASB can help. Call the experts at 855-393-9584.
*Not all products are available for collateral located in all states or for all amounts.
