A celebrity real estate broker has issued a dire warning to young Americans trying to purchase their first homes, telling Millennials and Gen Z that they need to ‘redefine affordability’ and manage their expectations.
Ryan Serhant, founder and CEO of a real estate brokerage that carries his name and known for his television appearances, told Fox Business that reminiscing about housing prices from years past is unproductive.
The celebrity broker, who boasts 2.7million followers on Instagram and represents luxury properties in Manhattan listed for tens of millions of dollars, said: ‘You have to understand that your baseline starts right now.
‘We are not going back anywhere. We’re not going back to the rates and the market we had in 2021. We’re not going back to 2015. We’re also not going back to 1991.’
Serhant’s comments come as an eye-popping 84 percent of Gen Z say they’re delaying major life milestones, such as getting married, having children and changing careers, to afford to buy a home, according to a Coldwell Banker study reported by Fortune.
According to a separate study from Clever Real Estate, about 79 percent of Gen Z already believe they can’t afford to purchase a home, and nearly 30 percent of survey takers have thought about squatting or living in their cars.
The situation feels so grim to younger people that one in five of those aged 18 to 28 think World War III is a bigger possibility than purchasing a house in the next five years, the study found.
‘The old baseline of affordability where the median-income buyer could reasonably plan to own a house, I think, is gone for most of the country,’ Serhant said.
Ryan Serhant, a celebrity real estate broker known for his television appearances, said that reminiscing about housing prices from years past is unproductive
Serhant’s comments come as an eye-popping 84 percent of Gen Z say they’re delaying major life milestones in order to purchase a home
Redfin’s chief economist, Daryl Fairweather, previously told the Daily Mail: ‘I think Gen Z sees how expensive it is to borrow to buy a home and feel defeated because affordability is so far out of reach.
‘High home prices and high mortgage rates are to blame, but beyond that, worries about their ability to earn enough money given the economy, the trade war, the job market, and AI replacing entry-level jobs are all adding to their pessimism.’
Most of Gen Z also feel that becoming debt-free, becoming homeless and world peace are all more likely than them owning a home.
The combined share of homebuyers aged 60 to 78 rose to 42 percent in the past year, and there are more boomers buying homes than Millennials and Gen X-ers.
The National Association of Realtors published a study last month that found the median age of first-time homebuyers rose to 40 years old, which is the highest ever recorded.
Serhant put the age of his clients even higher, explaining that ‘the biggest buyer base we have today are not Millennials. It’s not Gen Z. It’s boomers buying for Millennials and Gen Z. And oftentimes, they’re the ones at the closing table.
‘And so you have a lot of young people living in houses that are owned, but the 60-year-old bought the house. That brings the median age up. I think more younger people are living in homes they own or homes that were bought for them than ever before.’
Yet another study from Intuit Credit Karma found that 44 percent of Gen Z prospective first-time homebuyers plan to receive financial help from their parents.
Serhant said: ‘The old baseline of affordability where the median-income buyer could reasonably plan to own a house, I think, is gone for most of the country’
According to a study from Clever Real Estate, about 79 percent of Gen Z already believe they can’t afford to purchase a home
According to the National Association of Home Builders, Americans need to make $141,000 per year in order to afford a median-priced home, but the national average salary is about half of that.
Serhant, who has a six-year-old daughter and said he worries about her ability to buy a home in the future, offered a way for young people to reframe their goals in light of today’s economic reality.
‘It is much better to own than it is to rent, but you don’t have to. I think the American dream is a happy life defined by growth and success in whichever way you determine your success,’ the broker said.
And Gen Z’s chances for home ownership could improve depending on location. Cities such as San Antonio, Texas, are known for affordability and remote work opportunities.
‘The states that have been passing laws to build more dense housing like townhomes, multiplexes and condos will be the best for younger buyers,’ said Fairweather, the Redfin economist.
‘More starter homes being built will give Gen Z an easier way to get onto the housing ladder.’