Empowering Girls and Young Women: Achieving Homeownership by Age 30

Girls and young women have set a goal to become homeowners by the time they reach 30, which is considered more important than getting married or earning a lot of money.

According to Girlguiding’s Girls’ Attitudes Survey 2023, 52% of young women aged 7 to 21 want to buy a house by 30, making it their top goal. In comparison, 48% want to be married by 30, and 39% have a goal to earn a lot of money. The survey, conducted earlier this year, involved 2,614 girls and young women in the U.K.

This report aligns with findings from a survey in the U.S., in which 85% of teenagers consider owning a home as part of “the good life,” according to the 2022 Junior Achievement and Fannie Mae Youth Homeownership survey.

Although teenagers dream of homeownership in the future, the current housing market presents challenges. Houses are more expensive than they were before the pandemic, and mortgage rates are higher. In August, the median U.S. home sale price increased by 3% year over year to $420,846, marking the largest annual increase since October 2022, according to real estate brokerage firm Redfin.

Experts predict that prices are unlikely to decrease in the near future, as the Federal Reserve plans to continue interest rate hikes and homebuyers face a limited supply of homes.

However, young adults who are looking ahead to homeownership have time on their side.

“Hopefully, when they are ready to buy, the rate environment will be different, there will be more inventory, and the real estate market will be more balanced,” said Melissa Cohn, regional vice president of William Raveis Mortgage in New York.

According to certified financial planner Kamila Elliott, co-founder and CEO of Collective Wealth Partners in Atlanta, middle and high school students can start building financial literacy early. This preparation will set them up for success in the housing market when their turn comes around.

There are three key components to being able to buy your first home, as stated by Cohn.

1. Down payment

The down payment is the biggest hurdle for most homebuyers. Although the standard is to provide 20% down payment, it is possible to get by with much less. Jessica Lautz, deputy chief economist and vice president of research at the National Association of Realtors, told CNBC that many first-time homebuyers can come up with just 6% or 7% for their first home.

If a high school student wishes to buy a house in approximately 10 to 15 years, they can start saving money by working part-time and setting aside funds for that goal, explained Elliott.

While a savings account is essential for short-term goals, if you have been consistently saving money in retirement accounts, you may also be able to utilize those funds for your down payment. CFP Lazetta Rainey Braxton, co-founder and co-CEO of virtual firm 2050 Wealth Partners, mentioned that a Roth IRA is a type of retirement account that allows first-time homebuyers to withdraw up to $10,000 for their down payment without penalty. Braxton, a member of the CNBC Financial Advisor Council, suggested that first-time homebuyers can also explore down payment assistance programs offered by banks and states.

2. Credit score

When applying for a mortgage, banks consider your credit score, which reflects your ability to manage debt. Credit scores typically range from 300 to 850, with higher scores resulting in lower interest rates on loans.

Cohn emphasized that banks prefer borrowers who demonstrate consistent payment habits and responsible debt management.

To maintain a high credit score, it’s important to use credit cards responsibly, making full and on-time payments, as advised by Elliott, who is also a member of the CNBC FA Council.

3. Income

Having a stable income can also enhance your competitiveness as a homebuyer, according to Cohn.

Lenders evaluate your debt-to-income ratio to determine how much mortgage debt you can handle. Monthly payments for student loans, auto loans, or other lines of credit may impact this calculation.

If you haven’t held a job for at least two years and your income is based on bonuses or commissions, you may need a parent or family member to cosign the mortgage to demonstrate a more consistent income history, added Cohn.

If homeownership is a goal for early adulthood, it is important to anticipate the responsibilities that come with being a new homeowner. In addition to the mortgage, property taxes, and insurance costs, utility and maintenance expenses tend to be higher in a house compared to an apartment.

“Understand what it is to be a homeowner and how things work,” advises Elliott.

It’s essential to be aware that your first home may not fulfill all your desires. It should be located in an area you like and meet your basic needs.

“Your first home may not be your ‘forever home,'” says Elliott. “It might not have all the dream amenities like an open-air kitchen, a fireplace, or a pool in the backyard.”