Can Gen Z Actually Afford a Home in South Florida? Here's What the Numbers Say

4 MIN. READ

 

Key takeaways:

 

• Despite slightly lower home prices in South Florida, sales are down, and homeownership remains difficult.
• We share some tips young adults can use to build a solid financial foundation and get closer to the goal of owning a home.

Home prices are starting to cool off in South Florida.

However, we’re still seeing mixed signals, and buying a home remains challenging. For young adults considering homeownership, recent data from South Florida’s real estate market suggests that building a strong financial foundation remains key.

Lower Home Prices and Other Important Data for the South Florida Housing Market

Home prices are down by about 3.7% across Florida compared to a year ago. This trend is consistent across the southern portion of the state, even though it can vary from one city to another. For instance, house prices in South Florida are down by 1.6% in Miami and 4.4% in Fort Lauderdale, on average.

However, these lower prices aren’t enough to entice buyers, and sales are down across the board. In Miami-Dade County, single-family home sales dropped by 5% year over year, and there are 16.4% fewer homes on the market.

This 5% drop in sales, even with the 2-5% reduction in home prices, shows that affording a home remains difficult.
 

What Do These Numbers Mean for Gen Z and Homeownership?

Let’s break down why the path to homeownership is tough for young generations.

Across the country, first-time homebuyers now have a median age of 40, which is higher than it used to be.

Lower Prices: An Advantage for First-Time Buyers?

Seeing house prices drop is encouraging, but this 2 to 5% change isn’t enough to make up for decades of rising home prices.

It’s still good news for first-time buyers who can borrow less and are looking at slightly lower monthly payments.

Fewer Listings and Fewer Sales: Understanding Mixed Signals

With fewer homes for sale compared to a year ago, first-time buyers have fewer choices. They may settle for something that isn’t quite what they were looking for, and they’re losing bargaining power.

But with sales down, there isn’t much competition among buyers. This means some sellers might see their home sit longer on the market and be willing to drop the price or help cover closing costs.

Monthly Payments Remain the Real Barrier

The drop in sales is significant. Even though home prices are down, people aren’t buying.

Here’s why:
 

• Mortgage rates have been relatively high. Some might be waiting for a better financing deal.
• Saving up for closing costs and a down payment is tough when wages aren’t keeping up with inflation.
• Young adults are facing additional pressure. Saving for a home or keeping up with mortgage payments can feel impossible when they’re already dealing with student loan payments and limited opportunities for higher wages.
• Insurance is another important consideration. Hazard insurance premiums are up across Florida, adding to the financial burden of homeownership.

For young adults, homeownership is a long-term goal. They need to build a strong financial foundation so they can afford monthly payments ten or fifteen years from now.
 

How to Build a Financial Foundation for Home Ownership

It’s never too early to start thinking about homeownership and build the foundation that will help you get into a starter home years from now:
 

• You can get a house with 0% down thanks to first-time homebuyer programs, but having a nest egg makes things easier. You can use it to cover closing costs or a few home repairs.
• Keeping up with monthly mortgage and insurance payments is easier when your debt is under control. If you’re living with your parents or sharing housing costs with roommates, try doubling your credit card payments or making extra student loan payments when you can.
• Look into credit-building strategies now, so you have a strong credit history and score when you apply for a mortgage later.
• Increase your earning potential. Side hustles can be a good way to gain new skills, but you can also look into training or education opportunities to upskill. A well-paying job is the ultimate strategy for affording monthly mortgage payments.

Power Financial Credit Union Can Help You Plan for Homeownership

Buying a home might not be something you plan to do now, but it’s never too early to prepare.

At Power Financial Credit Union, we can offer personalized advice on how to budget, save, and manage debt so that you’re in a good position to buy a home a few years from now. And with a great first-time homebuyer program, we can help you get a home with no down payment and no PMI when you’re ready.

Contact us online to learn or visit a nearby South Florida branch for personalized banking advice.
 

FAQs

Can Gen Z actually afford houses for sale in South Florida?

Yes, but it is challenging. Lower home prices help, but they do not fully offset high mortgage rates, insurance costs, and the difficulty of saving for a down payment and closing costs.

Why are lower home prices not making homeownership easy?

The price drop is relatively small compared with the overall cost of buying and owning a home. Monthly payments, insurance, and financing costs still create a major barrier for many first-time buyers.

What do fewer sales and fewer listings mean for young buyers?

Fewer sales suggest sellers may be more willing to negotiate, but fewer listings also mean less choice. That can make it harder for buyers to find a home that fits both their needs and their budget.