Millennials and Gen Z are more likely than previous generations to be self-employed in some capacity—which can make buying a home more complicated. These expert tips help make sense of the process.
Once upon a fairytale, it was understood that if you graduated high school, got a job, and stuck to it, you would end up retiring with a modicum of grace and security at a predetermined age. With a little luck, you might even have a few golden years to enjoy in the company of your family and friends—and making your way towards that coveted dream didn’t even involve any kind of side hustle.
These days, things are a little different. Millennials and Gen Zers are still living the results of an economy laid low by the Great Recession, and that economic landscape means that they are far less likely to enjoy a forward-moving amble through corporate life the way their Boomer (and, in some cases, Gen X) predecessors did.
In fact, a recent survey carried out by CareerBuilder found that Baby Boomers stayed at each job for an average of eight years and three months, while Gen Zers only stay, on average, for a little over two years. Add to that the ongoing market mess caused by the COVID-19 pandemic, and it’s no wonder why the Gig Economy Data Hub estimates that a quarter of the entire American workforce participates in the gig economy in some capacity.
Not only has the economic reality made it difficult to be able to get and keep a long-term corporate job, it seems that members of these generations also don’t want to. Millennials and Gen Zers, for example, are more likely to choose to be independently employed, whether as a business owner or a gig worker, according to a survey carried out by MBO Partners. The same survey showed that, in 2020, 68% of new independent workers were members of those two generations. Challenges for Prospective Home Buyers
To make matters worse, the real estate market is having a bit of a chaotic moment as well. Housing prices have gone up, especially since the pandemic made working from home more common and desirable. According to data aggregated by DQYDJ , the median price for a single-family home in January of 2019 was $275,236 and change. Now, as we near the end of 2021, federal census data shows the same number as $408,800—an increase of $133,564. On its face, this data suggests that a workforce that’s gigging more than ever is also paying more than ever for housing . How are they doing it?
It turns out, a lot of them aren’t—and the hefty prices aren’t helping. According to Apartment List’s 2021 Millennial Homeownership Report, this generation isn’t exactly optimistic about owning property; the report shows that 18.2% of millennials expect they’ll never be able to buy a home. In 2019 and 2018 that number was 12.3% and 10.7%, respectively.
“Low housing inventory, unusually high demand, and record low interest rates have driven home prices skyrocketing across the country since the start of the pandemic,” says Andy Taylor, vice president and general manager for Home at Credit Karma . “In a world of expensive homes, buyers need to take out larger loans for the same housing stock, and many first-timers are being priced out.” It doesn’t have to be that way, though. Regardless of age, whether you’re a contractor or a salaried employee, and irrespective of your income status, there’s a path to homeownership for you. Actually, the gig economy might even be offering a better way to get to a down payment.
“The gig economy has been a powerful force for people’s personal finances,” says Robert Farrington, founder and CEO of The College Investor . “I think most people leverage it in one of two ways: [Either] to survive [or] to thrive. First, there are people who have resorted to gig work simply to close a gap in their finances. [Among those] who have leveraged gig work to thrive, I believe that gig work has enabled [them] to achieve financial goals faster—whether that is saving for a home or retirement, paying off consumer debt, and more.”
Farrington emphasized that “anyone can apply for a mortgage,” and encouraged first-time homebuyers not to dismiss the prospect at the outset. That being said, self-employed applicants should also prepare for some extra acrobatics during the application process. Types of Mortgages for Self-Employed Home Buyers
Mortgages come in an array of flavors and sizes , and choosing the right one for […]
source How to Get a Mortgage if You’re a Freelancer, Contractor, or Self-Employed
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