Gen Z, Active-duty Military Members Express Concern with Home-buying
Written By: Joel Palmer, Op-Ed Writer
A pair of key demographics are concerned about their ability to navigate the home-buying process, according to a pair of recent Freddie Mac surveys.
Freddie released the results of separate surveys of “Generation Z” and military veterans. Both surveys showed many people in these groups worry about their ability to buy a home in the future.
Freddie found that respondents to the Generation Z survey — which consisted of adults ages 18-25 — are mostly positive about the idea of homeownership. However, 34 percent say homeownership seems out of reach financially.
“Currently in the housing market, we’re seeing rising mortgage rates, insufficient supply and elevated house prices bringing about significant affordability challenges,” said Pam Perry, Single-Family Vice President of Equitable Housing at Freddie Mac. “Gen Z has taken notice and their hopes of homeownership have waned as the potential issues they may face in purchasing a home have become front and center.”
Gen Z adults identified the following as the top five hurdles to homeownership:
Saving for a down payment
Not having a sufficient credit history
Unstable job situation
Student loan debt
Credit card debt
Mortgage processors and underwriters can be especially important to helping Generation Z, as less than half (47 percent) are confident in their knowledge of the overall home buying process.
The same is true for active-duty service members. Over half of the respondents in the military survey said they could have used more information when they were going through the mortgage process.
Meanwhile, 64 percent of active-duty service members transitioning to civilian life expect their search for affordable housing to be extremely or somewhat challenging.
“The ability to find affordable housing in the current market is seen as a major challenge facing those transitioning from active duty,” said Stacy Walker, Director, Housing & Community Outreach for Freddie Mac. “The great news is that there are outstanding housing benefits available to veterans and the majority of those who want to buy a home plan to use them. To aid that effort, Freddie Mac is focused on education and outreach through a VA Home Loans guide and a CreditSmart financial education program tailored specifically for members of the military and veterans.”
About 87 percent of active-duty military are aware of the benefits of VA loans. The survey showed that 90 percent of active-duty service members who are currently renting plan to use a VA Home Loan to buy a home at some point.
Homeownership rates among those surveyed are disproportionately high at 73 percent, compared with 65 percent for the general population (according to the U.S. Census Bureau). About 44 percent of those used the VA loan to finance their purchases, the most popular financing option.
The Generation Z survey was conducted in March and April of this year, with followup interviews done in June and July. The military survey was conducted in September and October of this year.
About the Author
As an NAMU® Opinion Editorial Contributor, Joel Palmer is a freelance writer who spent 10 years as a business and financial reporter and another 10 years in marketing for the insurance and financial services industries. He regularly writes about the mortgage industry, as well as residential and commercial real estate, investments, and retirement income planning. He has also ghostwritten books on starting a business, marketing, and retirement income planning.
