Owning a home is part of the American Dream, but saving for your first home can be challenging. Millennials and Gen Z first-time home buyers especially face hurdles with high housing costs and economic uncertainty. Despite the obstacles, according to a recent article in National Mortgage News, 56% of Gen Zers and 51% of Millennials believe that current conditions are favorable for buying a home. How to save money for a house and how much to save for a house are key considerations. Here are some practical tips to help you on your road to save money to buy a house.
Build a Budget and Pay Down Debt
The first step in saving money to buy a house is creating a detailed budget that outlines your income and expenses. Identify areas where you can cut back and put aside a portion of your income for your home savings. Use budgeting apps to track your spending and stick to your plan.
It’s also important to focus on paying down debt. High levels of student loans and credit card debt can make it harder for a person to save. Prioritize paying off high-interest debt to improve your credit score and free up more money for your savings.
Lower Expenses
For those who can, temporarily moving back home is an option to help save for a down payment. Nearly 46% of parents have reported their adult children moving back to save on living expenses. This trend is called “boomeranging.” It allows people to save significantly on rent and build savings faster. The extra money can be put aside to save for a house deposit.
Many others have taken advantage of the flexibility offered by remote work. Consider moving to a more affordable area while keeping your job in a higher-cost city. This can also reduce living expenses and increase the ability to save.
Creative Hacks
“House hacking” involves purchasing a property and renting out part of it to cover mortgage payments. This approach is gaining popularity among younger generations. It’s a creative way to make homeownership more affordable. According to recent surveys, many young adults are open to sharing their living spaces to bring down costs.
Another hack is to explore first-time homebuyer programs in your area. Many states offer financial assistance, including down payment assistance, lower interest rates, and tax credits. Research available programs and take advantage of these opportunities—in Wisconsin, Illinois, or wherever you live.
Here’s one more. Understanding the housing market can help you make better decisions about when and where to buy. Stay informed about market trends around housing. Remain positive and well informed so you can seize the right opportunity when it arises.
Maximize Your Savings
Consider keeping your down payment savings in a high-yield account. These accounts offer higher rates than regular savings accounts, which makes your money grow faster. Verve offers high-yield checking and savings accounts, like KickBack Checking®, so you can earn more on balances.
Verve also offers other savings options and accounts to support you in reaching your goals, like Name Your Savings, which helps you be intentional about saving for a house deposit.
Think Beyond the Down Payment
It’s easy to want to make a move on a house purchase as soon as you’ve saved the minimum 3% for first time buyers. However, something to remember is there is no longer a landlord to call when something needs repair or replacing. Save a little more a little longer and you’ll have a cushion for the unexpected expenses that come with home ownership.
Learn more about Verve’s personal savings options.
Give us a call at 800.448.9228 or visit a nearby branch to open an account or learn more. Verve has tips and resources on all kinds of topics around money management. Sign up to have them sent straight to your inbox.
Federally Insured by NCUA | 
Equal Housing Opportunity |