Study: Gen Z would have to save for 18 years to afford down payment on Seattle home
Mar 29, 2021, 11:58 AM | Updated: 12:31 pm
A new study estimates that members of Gen Z would have to set aside money for over 18 years in order to afford a down payment on a Seattle home.
Pandemic has Puget Sound residents leaving cities for the suburbs
The study from research group Point2 calculated how long each generation — Gen Z, millennials, Gen X, and Baby Boomers — would need to set aside 17% of their income to eventually afford a 20% down payment on a median-priced home in Seattle, as of January 2021.
Gen X (those between the ages 45 and 54 years old) boasted the shortest window of time needed to afford a down payment at 7.5 years, based on their $112,415 average household income (adjusted for inflation).
Millennials (ages 25 to 44) had the second shortest window at 7.7 years, followed by Boomers (ages 55 to 64) at 7.9 years, and then Gen Z (ages 15 to 24) at a whopping 18.3 years.
That’s largely driven by Gen Z’s smaller average income, sitting at just $53,896, compared to millennials and Boomers at $109,043 and $106,931, respectively. In even more expensive housing markets like Los Angeles and San Jose, Gen Z would have to save for up to 23 years for a down payment.
Buying Puget Sound home harder ‘than any time in past 40 years’
In Seattle — and the greater Puget Sound area — home prices in recent months have been continuing to trend up, driven largely by dwindling supplies and increasing demand as more people have sought larger remote work spaces.
Despite that, Windermere Chief Economist Matthew Gardner also noted in February that homes can only get so expensive before the average person can no longer afford to buy one. Because of that, he expects the Puget Sound market’s rapid price increase to plateau sooner rather than later.
“You cannot sustain that,” Gardner said. “There must always be a relationship between incomes and home prices, so I think that’s really going to be the ceiling.”
