How Much Home Gen Z Can Afford on Their Average Salary
Written by
T. Woods
Edited by
Daria Uhlig
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In these final months of an economically contentious presidential election season, many Americans have some uncertainty about the housing market, the job market and their ability navigate one or the other or both. It is likely all the more stressful for the youngest and most financially inexperienced adults: Gen Z.
The oldest Gen Zers are typically several years out of school and several years into their careers. As a logical next step, many are likely weighing their options in the real estate market and wondering just how much house can they afford on their current salaries.
According to a GOBankingRates survey taken in 2023, the median salary for a person defined as being in Gen Z (i.e., born between the late 1990s and the early 2010s) is approximately $35,050 per year.
GOBankingRates used the Homebuying Budget Calculator from Freddie Mac to to see how much home someone can purchase on that salary. According to those calculations, a person with the median Gen Z income of $30,050 can most likely afford a total monthly house payment, including mortgage, homeowners insurance, property tax and private mortgage insurance, of $818. Just $389 of that is for the mortgage payments, which translates to a home worth up to $64,878.
Given that the lowest average single-family home value in America is West Virginia’s, at $169,488, according to a recent GOBankingRates study, members of Gen Z have to be creative and clever to successfully negotiate the current housing market.
For instance, keeping your debt level low will maxmize the loan amount you can be approved for. And saving a significant amount of money before you begin house-hunting will greatly increase the amount of down payment you can offer, which means you can afford a more expensive home. Also consider state and local down payment assistance programs, as well as those offered by some lenders. The programs provide grants and loans, which often can be forgiven, to help first-time buyers purchase a home.
One way to save more is to reduce your current housing costs by sharing a home. Many Gen Z households are comprised of roommates — rather than family members or romantic partners — to help distribute the burden of rent. More roommates under the same roof means less rent that each person has to pay.
While a group of roommates may not be who you envisioned sharing your home with, it would provide for a roof over your head and allow you to save more money to use as a down payment on a home of your own.
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