Twentysomethings acquiring deeds? It’s a thing.

But in this market, how are Gen Zers pulling it off? According to the National Association of REALTORS®, Gen Z now holds 3% of U.S. home deeds. And the numbers also suggest that many young buyers had to be awfully scrappy to get these deeds.

Profile of the Gen Z Buyer

The profile of first-time buyers has changed radically over the generations. Most home buyers in their twenties are single today. The scarcity of “starter homes” may well be a key reason young people are putting off marriage and raising kids. In any case, solo buyers can have a harder time qualifying for mortgages. All the more so, given the recent surge in home values.

On the other side of the coin, solo deed holders are comfortable in smaller homes.

Gen Z buyers are more active in markets that offer value for money. That’s not new, but Gen Z buyers are making decisions that distinguish them from millennials. About half of millennials who went to college have carried student loan debt into their 30s. Gen Z buyers are more likely to prioritize deeds over degrees. This could be one reason why Redfin says young adults (up to age 26) are outdoing the home buying of millennials and Gen Xers in their younger days.

Most twenty-somethings say homeownership is important to building wealth and attaining financial freedom. And the majority of Gen Z believes buying a home is the main measure of financial success. No wonder nearly three-fourths of this generation hopes to buy a home within the coming six years, even in this tough-to-crack market. That’s according to Rocket Mortgage.

Clearing Hurdles

To save up for a down payment on a home, some young people are living with their parents. Some are fortunate enough to have help available from family. According to Redfin, about a third of Gen Z buyers seek cash gifts from family members to help.

But they have figured out other methods as well. Among the alternative Gen Z approaches are these:

• Pool resources. Like millennials before them, they have found their way by co-buying their first homes. It’s not unusual to find siblings, co-workers, and good friends buying together — so they can buy at all. Seventy percent of Gen Zers say they’d be willing to share a deed with a friend. Caution! Co-buyers who name themselves on a deed as tenants in common should have a separate written agreement laying out responsibilities.

• Invest sweat equity. Young buyers are taking on the boomers’ fixer-uppers. Gen Z is joining a new generation of renovators. Fifty-seven percent of Gen Zers say they’re willing to take on major repairs to get a lower home price.

• Compromise. When all else fails, goes the adage, lower your expectations. About one in four buyers in the Gen Z cohort will live in areas they consider less safe to get a home they can afford.

• Leverage government support. Younger buyers do the digging to find and apply for grants and down payment assistance plans. They also rely on Federal Housing Administration (FHA) loans, which can be easier to land than conventional loans.

• Look into condo properties. Condos tend to be an easier reach, financially. Check out our information on the kind of deed a condo buyer holds.

• Help each other. New generations of social media users are there for the real estate tips. Gen Z buyers find information and moral support online (search: “Gen Z realtor”), as real estate influencers help their younger peers navigate the market.

• Take on renters. Some buyers will even become entrepreneurs — buying properties with an extra unit or two. Borrowing for these properties at residential interest rates is possible with the Federal Housing Administration (FHA) for properties with up to four housing units. Some online personalities encourage their fans to try their hand at house hacking.

Why are Gen Z buyers willing to be scrappy to get what they want? These days, they feel, that’s what it takes to build a financial foundation. Some will sell these homes later. Then they’ll be able to buy again, with larger down payments and fewer compromises.

Winter house hunting? Why not? It can be a perfect pathway for young, “digital native” home seekers.

Notes for First-Timers

There’s no way to sugar-coat this market. We have seen prices rise during the pandemic while the government held interest rates way down. The low rates were fleeting. Now, we see high price tags, elevated borrowing rates, and a big monthly cost for the typical mortgage borrower.

Young people who do want to wade in can ask mortgage consultants about:

• FHA loans (3.5% down with a 580+ credit score).

• Conventional loans like Freddie Mac’s Home Possible® (3.5% minimum down payment).

If you’re concerned about your credit score’s impact on the loans that may be available to you, consider some credit repair steps you can take.

Social media posts can help the scrappy home seeker. Lots of information is available online about particular homes and their broader neighborhoods, about climate, financial trends, entrepreneurship, and so on. From social platforms, Gen Z has a vantage point to understand markets in ways past generations could not.

For those who are set on acquiring a deed, as a surprising percentage of Gen Z is, then there’s inspiration and information out there. Whether it’s TikTok, Reddit or Instagram or something else, people who know the ropes are showing their peers what they’re doing.

This is not to say that all Gen Zers should immediately jump into the real estate market or exhaust themselves trying. People can strive for a variety of valid goals in early adulthood, and acquiring a deed is only one path ahead. Becoming informed about the possibilities is the best way to a well-reasoned decision.

Important note: Buying a home shouldn’t involve risk, but the truth is it does. It can also bring financial strength. Each decision carries its own set of facts, and its own context. This is why consulting with a financial adviser or real estate law expert in your state is so important. This article is not financial or legal advice.