SEATTLE — A new study suggests that it'll take Gen Z'ers nearly two decades to save up for a down payment on a home in Seattle.
A recent Point2 study found those in Gen Z will have to save up to 18 years to afford a 20% down payment on a Seattle home. Millennials will spend close to eight years saving, and Gen X will spend 7.5 years saving up the money, according to the study.
The study, which uses median home prices and incomes, assumes most young buyers are saving up for a 20% down payment.
"Affordability is becoming a very, very significant issue now even more than it was a year or so ago," said Matthew Gardner, chief economist with Windemere Real Estate.
That can feel like you’re chasing a moving target, especially in western Washington.
"The big issue is there's nothing to buy. And on top of that, we're not seeing the new construction activity that I would like to see," said Gardner.
Gardner said it's important to point out that not all first-time homebuyers will put down a 20% deposit. He said there are plenty of programs that offer lower down payments. Despite those options, the pandemic has only intensified the process, causing first-time homebuyers to feel priced out.
"It is a very tough and very tight market, and I'm afraid this year. It's very unlikely to change," said Gardner.
Gardner said things will eventually come to a head.
"So mortgage rates have been going significantly higher. Although still relatively speaking very, very cheap, but they are going to continue to rise that acts as a headwind to home price growth," said Gardner.
For the time being, first-time homebuyers are finding themselves in a bit of a pickle. They're either forced renters, or move to a more affordable market – like Spokane, Boise, or even Las Vegas.
"Why do I choose those three cities? Well, you can buy a brand new, never-lived-in single-family home for about $350,000. Good luck finding a shoebox in Seattle for that," said Gardner.