How to Plan Now for Homeownership Later

The dream of homeownership is well within your reach! In 2021, 65% of US residents owned their own homes, and you can, too. While the median age of first-time homebuyers has been increasing—for a variety of reasons—16% of homeowners are members of the Gen Z or millennial set. How did they get there? Usually, by careful financial planning. The sooner you start planning, the sooner you’ll have the keys to your first home. Here are a few tips on how to set out on the path of homeownership both before and after graduation.

Tip #1: Make Saving a Habit

 We get it. Money may be short while you’re in school. But most students and recent grads can manage to set aside a few dollars a month in a savings account. Skip one store-bought smoothie a week. Ride your bike rather than take an Uber when the weather permits. The point is to get in the habit of saving now so that when you have more money to set aside, it will be part of your routine. Saving money is a great skill, no matter what age you are.

Tip #2: Take Advantage of Your Employer’s Retirement Plan

Don’t leave free money on the table! If your employer offers a 401K with matching contributions, commit to putting a portion of your paycheck into it as soon as you’re eligible. In today’s competitive job market, more and more employers use retirement benefits to attract qualified employees. At Starbucks, for example, even part-time employees can contribute to a 401K with employer matching contributions after just 90 days of starting work. Many more companies offer the same benefit.

Tip #3: Get Smart About the Mortgage Marketplace

There are more mortgage options out there than ever before. Mortgage lenders run the gamut from traditional banks and credit unions to upstart financial technology companies that offer very competitive rates and a fully digital lending experience. The time to learn about mortgages is before you need one. That way, you’ll be prepared to make an informed decision when it comes time to buy your home.

Tip #4: Create a Homeownership Budget

When you set a goal, it’s best to make it measurable. That way, you can keep your eye on the ball and track your progress toward reaching it. Start by checking out home prices in the city or town you want to live in. Then, using an easy homeownership calculator, figure out how much home you can afford at a range of salaries. Knowing how much you’ll need to save and earn to buy and support a home can inform your financial and career choices. 

Tip #5: Build A Positive Credit Profile

Mortgages come with various interest rates and terms. The best way to ensure that you’re offered the lowest mortgage rates and the most options is to maintain excellent credit. Many students graduate from college with no credit history. With no credit history, it’s unlikely you’ll be approved for so large a loan as a home mortgage. So the time to begin building one is while you are in school. Open one or more credit accounts as soon as you are able. Gas and store credit cards usually offer easy approval. The trick is to use your credit cards frequently and make all of your payments on time. Ideally, pay off the entire balance on each card each month. That demonstrates to mortgage lenders that you can handle credit cards responsibly.

Recent trends in the real estate and lending markets are making buying a new home more challenging than in the early years of the pandemic. Home prices remain high and are expected to rise modestly over the next year. A move by the federal government—raising the federal funds rate—was followed by an increase in mortgage interest rates. But sometimes, dreams take time to come true.  Follow these tips, and you’ll be well on your way to homeownership. It’s never too early to begin working toward an important goal.

Author Bio:

Susan Doktor is a journalist, business strategist, and four-time historic homeowner. Her contribution comes to use courtesy of