Should Gen Z Save for a House or Start a Family?
Written by
Martin Dasko
Edited by
Amber Barkley
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According to a recent survey from Insurify, 31% of Gen Z want to buy a home because they’d like to start or support a family. With stubborn inflation bringing up the prices of everything over the last few years, it’s evident that many young Americans are making sacrifices to reach major financial milestones — like trying to start a family or purchasing real estate.
GOBankingRates contacted experts to help determine if it makes sense for Gen Z to start a family before owning a home or if they should wait to buy their first home before starting a family. Also, learn about some of the creative ways Gen Zers are able to afford houses, even with high costs.
When It Makes Sense for Gen Z To Start a Family First
Sometimes, starting a family first makes more sense than waiting until you have purchased your first home. Here are a few of the benefits of starting a family first.
You Can Focus On Building a Stable Home Environment
“You can create a stable environment for your kids right from the beginning,” said Gary Hemming, the commercial lending director of ABC Finance Limited. “Plus, focusing on family first can help you and your partner strengthen your relationship and get emotionally ready for parenthood before diving into the financial commitments of owning a home.”
You don’t have to own a property to build a family, and you can use this time to design a stable living environment instead of waiting. Economist Rogers Dhliwayo added, “Starting a family first can offer the flexibility to choose a home that suits the evolving needs of a growing family.”
Don’t Make Decisions Based On the Expectations of Others
“One common misconception is the idea that you must buy a home before starting a family or that you should delay family plans until after purchasing a home,” said Lukasz Kukwa, a real estate advisor at eXp Realty. “In reality, there is no one-size-fits-all approach, and it’s crucial to avoid getting caught up in societal expectations or overthinking the process.”
While home ownership is generally acceptable as a logical step as you enter adulthood, you have to keep in mind that personal finance is personal.
Home Ownership Isn’t for Everyone
Kukwa pointed out that it’s essential to dispel the myth that renting is inherently inferior to owning and that you should buy a place before making any other financial decisions. He added, “Society often promotes homeownership as the ultimate goal, but this perspective doesn’t account for individual circumstances.”
Prioritize investing your money in ways that make sense for your situation. For some, investing in real estate is wise, while others could benefit from allocating their funds toward the stock market and other assets.
When It Makes Sense for Gen Z To Buy a Home First
The Insurify survey found that Gen Z mainly wanted to buy a home to start a family, while 22% stated they wanted to enter the market to build generational wealth. Here’s when it makes sense to buy a home before you start a family.
It May Take Longer To Save for a Down Payment If You Start a Family First
“Raising a family is expensive, and adding the costs of buying a home on top of that might stretch your budget,” said Hemming. “You might find it hard to save for a down payment or end up taking on more debt.”
You may struggle to save up for a down payment if you have to stress about the costs of raising a child — or multiple children — on top of trying to ensure you have enough to qualify for a mortgage.
You Can Purchase the Ideal Residence for Your Family
“Purchasing a home before starting a family provides a stable and secure environment for raising children, offering peace of mind and a solid foundation,” said Dhliwayo.
Hemming pointed out that your initial living situation might not be ideal if you’re renting, which could affect your comfort and convenience. He added, “It gives you financial stability and the chance to build equity over time, which can be really valuable when you expand your family.”
You’ll also be able to design a space that anticipates your family’s needs from the start, since you’ve taken the time to establish yourself.
How To Decide for Yourself
“Focus on making decisions best suited to your unique situation and life goals and how they fit into your financial and physical situation,” Kukwa said. “Evaluate your financial circumstances carefully, considering what you can afford in terms of living expenses, whether through renting or owning.”
The experts agreed that deciding between home buying and family planning can be challenging, since there isn’t a simple solution that works for everyone. Either route has various advantages and disadvantages.
Nikki Beauchamp, NYRS, an associate broker with Sotheby’s International Realty in New York, said that she’s had numerous conversations with her clients’ Gen Z children, who are exploring their steps post-college. She added, “Many are opting to stay home to be able to save more for future housing plans and/or looking for alternatives to high-cost urban areas.”
This means that you could also choose to stay at home longer, while you try to save up enough money to be able to purchase a home while simultaneously trying to start a family.
Here are a few other considerations to keep in mind when choosing between these two major financial milestones:
- Renting makes sense if you want flexibility and mobility.
- The decision to rent or buy should align with your lifestyle, not be driven by societal norms.
- You should weigh your long-term financial goals against your current income stability.
It’s important to remember that you should strive to find the balance that works for you and that you may want to speak with a financial advisor to help you make the most informed decision as you navigate this period of your life.
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