Helping a homeowner will become a must-have amid inflation

In the face of a potential recession, inflated home prices and ever-increasing interest rates, home ownership is on the move for more and more Americans. he is Employer help part of the solution?

In 2020, 30% of all households had what were considered “unaffordable” rent or mortgage payments, according to Harvard’s annual State of Housing Report. Two years later, the problem worsened — home prices rose another 20.6% from March 2021 to March 2022 and rents jumped 12%. As a result, one in five employees is planning to put off buying a home due to its financial situation, according to a recent SoFi study on the future of the workplace.

‘The issue of affordability is beyond the scope [employees’] says Barrett Scraggs, director of workplace financial wellbeing at SoFi at Work. “And what we’re seeing is that this group of people is now expecting, asking or hoping their employer will do more to help them.”

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Sixty percent of employees said they want their company to add, improve, or expand assistive home ownership benefits, according to a SoFi report. Scruggs says the most realistic first step to offset the costs of housing expenses is to expand existing financial wellness programs to help support workers’ finances, such as student loan repayments, automatic savings programs and financial health coaches.

“With student loan programs, the employer contributes a sum of dollars a month to employee debt, so that employees can put that dollar amount into a savings account and store enough for a down payment on the home,” Scruggs says. “[A financial coach] It can teach employees how to free up cash flow in their budget and help them figure out the best way to navigate this home buying process.”

Although it is needed More forms of direct support, The only type of housing assistance that Scruggs tend to see are transportation services that direct employees in the direction of third-party resources to help them find airline tickets or carriers at a lower price, but that doesn’t actually help in doing Finding Living.

For Generation Z employees in particular — who are struggling to make rent payments in the current financial landscape — these solutions simply aren’t enough to make any real long-term impact on their journey toward home ownership.

“Many of my friends are in their mid-twenties and live in cities [where] Rent is expensive and home ownership feels impossible,” says Megan West, 25, founder and CEO of Gen Z VCs, a group of Gen Z founders, angel investors and venture capitalists. But many Gen Zers Wants to own homes.

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Last year, Loyst surveyed nearly 300 Gen Zers in her community and found that 90% have aspirations to be homeowners. She says that many young venture capitalists are looking for companies that manufacture housing – in particular home ownership – More accessible.

“I would like to see employers work with startups that address real problems in the space, especially for younger employees, if they have B2B sales,” Loyst says. “For example, rent payments that are trending toward home ownership for Generation Z.”

The idea of ​​this is similar to how an employee contributes a portion of his or her income to a 401(k), except that there is an option to set aside a portion of his income for future homeownership, where employers can match employee contributions. West says this kind of innovation could really change the way younger generations view home ownership in the current market.

This stadium stands as a more modern version of the list Employer assisted housing subsidies, which helps employees access home purchase support and loans that can be forgiven over the employee’s tenure with that organization. However, such offers are far from widespread.

The affordability crisis is also coupled with the shortfall of nearly 3.8 million homes, according to Habitat for Humanity, adding a new and complex layer for employees even just looking for somewhere to settle.

“The bad news is that whatever we feel now is only going to get worse,” says Carlos Abisambra, president and CEO of Travelers Haven, a short-term apartment rental agency. “The last time [vacancy rates] That drop was 1984 – nearly 40 years ago. Even if all the construction work taking place at this time today is completed, it will not be enough.”

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The move to virtual work has done much to liberate corporate employees, as many remote workers have recently become digital nomads and moved to smaller and more rural communities in the midst of the pandemic. For industries that depend on short-term but essential workers, the influx of these new residents into smaller areas has added a new layer to the housing crisis.

Travelers Heaven, which primarily works with Essential workers looking for short-term housing Whether nurses have been called to understaffed hospitals or construction workers have had to cancel many contracts in recent weeks because they simply couldn’t find enough housing available to their clients.

“We’ve seen employers innovate,” says Abisambra. “In hospitality where employees come in full seasons, we’ve seen employers collaborate with college campuses while students are away for the summer, or with senior living facilities with vacancies.”

But these options Unsustainable in the long term Which means that all workers, regardless of short- or long-term housing needs, will continue to face financial stress. Scruggs anticipates that employers will eventually have to make homeowner assistance a permanent part of their benefit offerings to support their employees and attract talent.

“Inflation is one of America’s biggest concerns right now,” says Serges. “And this fear will not go away in the very near future and will continue to drive certain expectations of employees from their employers.”

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