4 Reasons Millenials and Gen Z are Struggling to Buy Their 1st Home

The dream of owning a home has become increasingly difficult for Gen Z and Millennials. There are a few reasons why these generations are not buying homes. The first reason is the issue of housing affordability. The cost of homes has risen above the rate of inflation, home prices have risen over 200% in the last 20 years, making it difficult for many to afford a down payment, let alone the monthly mortgage payments.

The second reason is strict mortgage standards. Lenders have become more stringent in their approval process, making it harder for many individuals to qualify for a mortgage. This is particularly true for those with lower credit scores or those who have not been able to save a significant amount for a down payment.

The third reason is the increased competition in the housing market. With more hedge fund, large scale investors and banks buying single family homes at very high rates, the every day buyer cannot compete against their cash offers and quick closes. This drives up the prices of homes, making it even more challenging for those on a budget to find an affordable property. Between rapidly increasing home prices and the rise of institutional buyers, the “starter" home” is beginning to disappear.

Finally, high debt amounts are also making it difficult for Gen Z and Millennials to buy homes. Student loan debt and credit card debt are common issues that many face, leading to a lack of funds for a down payment or monthly mortgage payments. Cherry’s innovative finance algorithm gives each buyer using our rent to own program a custom action play to decrease their debt, increase their credit score and prepare them to become homeowners.

Overall, these four reasons contribute to the challenges that Gen Z and Millennials face when trying to buy a home. It's important to address these issues to ensure that everyone has an equal opportunity to achieve the American Dream of homeownership. Through Cherry’s innovative products, we can help buyers improve their finances, submit their own competitive cash offer, and help buyers save more money for their home purchases, removing these common barriers holding buyers back.