3 Myths Stopping Millennials and Gen Z from Buying a Home (And Why They're Wrong)
The idea that owning a home is out of reach for Millennials and Gen Z is flat-out wrong.
Homeownership might seem like a pipe dream for younger generations, but much of that anxiety stems from misinformation and myths. The good news? Those myths can be busted, and you can take the first steps toward owning your own home. Here are the top three myths keeping Millennials and Gen Z from entering the housing market and why you shouldn’t let them hold you back.
Myth 1: Interest Rates Are Higher Than Ever
It’s easy to see why the younger generation might think interest rates are sky-high. After all, the 2008 financial crisis and the COVID-19 pandemic brought unprecedented challenges. But let’s clear this up: today’s rates are nowhere near historic highs. In the 1980s, interest rates peaked at a staggering 18.63%—a number that makes today’s average of around 6.75% look like a steal.
Why this matters: While rates aren’t as low as the 2% we saw during the pandemic, they’re still reasonable by historical standards. And here’s the kicker: home prices tend to rise when interest rates drop. If you’re waiting for rates to fall again, you might end up paying a higher price for the home itself. Remember, you can always refinance to a lower rate later, but you can’t refinance to a lower home price.
Tip: Start exploring your mortgage options now. Don’t let the fear of higher interest rates stop you from entering the market—especially when today’s rates are still considered favorable in the grand scheme of things.
Myth 2: You Need 20% Down to Purchase a Home
Here’s a classic myth that’s been scaring off first-time buyers for years: the idea that you need to put down 20% to buy a home. The truth? You can buy a home with much less. Only 36% of Millennials and Gen Z know that there are programs designed to help you get a mortgage with a down payment as low as 3%.
Why this matters: Programs like FHA loans require just 3.5% down, while VA and USDA loans often require nothing at all. There are also Conventional 97, HomeReady, HomePossible, and HomeOne programs that allow for 3% down, and they’re designed specifically for first-time buyers.
Mistake to avoid: Don’t spend years saving up for a 20% down payment when you don’t have to. Consult with a knowledgeable real estate professional who can guide you through your options and help you take advantage of these opportunities.
Myth 3: You Need Stellar Credit to Qualify for a Mortgage
The third myth that keeps Millennials and Gen Z out of the housing market is the belief that only those with near-perfect credit can get a mortgage. The reality? You can qualify for a mortgage with a credit score in the 500s.
Why this matters: FHA loans are available with a credit score as low as 580 (or even 500 if you’re putting 10% down). VA and USDA loans also don’t have any strict minimum credit score requirements. Your credit score is important, but it’s not the be-all and end-all. Lenders look at the entire financial picture, including your income, debt, and savings.
Actionable tip: Don’t assume your credit score disqualifies you. There are plenty of resources available to help you improve your credit and find the right loan program. Speak with a mortgage lender or financial advisor to get a clear understanding of your options.
My Final Thoughts: Stop Believing Myths and Start Your Homeownership Journey
Believing these myths can keep you from achieving the dream of homeownership, but now that you know the truth, you’re one step closer to buying a home. Remember, the market is always changing, and while it can seem intimidating, the key is to stay informed and seek professional guidance. If you’re ready to take the plunge or just want to explore your options, I’m here to help. Don’t let myths hold you back—reach out today, and let’s discuss how to turn your homeownership dream into a reality.
And if you know anyone who’s also feeling discouraged about buying a home, please send them my way. Together, we can bust these myths and make homeownership possible for more people in our community.
This article gives you the facts, the encouragement, and the tools to make informed decisions. Let’s break down these barriers together—your future home is closer than you think!
Source: Realtor.com
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Dan McDevitt
Cummings & Company Realtors
Team Leader Realvolution Homes Group
