HomeVest is helping employees save for their first home

The process of buying a house can feel near impossible for the average employee, but a new workplace benefit could help clear the path to ownership. 

Thanks to a steep housing market and rising mortgage rates, the average age for first-time homeowners in the U.S. is 38-years-old, the highest it has ever been, according to data from the National Association of Realtors. In an effort to make buying a home attainable for every age demographic, Jonathan Mesa founded and launched payroll-based savings platform HomeVest to enable organizations and benefit leaders to play an active role in the process.  

"If we assume that this is a linear projection, in another 30 years that median age will only get higher," Mesa says. "My goal with HomeVest is to push that line in the other direction and make it possible for first-time home buyers to get younger." 

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HomeVest functions almost exactly like any other employee benefit contribution, such as a 401(k) or an IRA without the tax breaks. The platform integrates with an organization's payroll system and is accessible to employees through their workplace portals. Much like with retirement and insurance payments, users can choose how much of their paychecks they want to put towards a down payment as either a dollar amount or a percentage of their paystub. That money goes into a separate savings account managed by the platform where they can track their progress and set long-term goals. 

"A lot of folks want to save for their house, but they [aren't disciplined]," Mesa says. "The reason a 401(k) is so successful is because psychologically it takes the accountability out of their hands. I didn't see why I couldn't replicate that." 

A financial aspiration for employees

Homeownership is still a priority for most adults: According to the Harris Poll, 42% of respondents said they wanted to buy a house, but 75% said current economic conditions derailed their plans. Today, only 30% of renters think they will buy  within the next five years, according to data from Gallup, with 45% believing they won't be able to for the foreseeable future, citing an inability to build a down payment. 

While the younger generations are the most likely to feel this financial strain, they are also the most viable target demographic for a homeownership benefit, Mesa says.    

"[They] are much more aware of the housing situation than organizations may think," he says. "If an organization can appeal early on in a Gen Z or Gen Alpha's career, when they're fresh out of college and searching for their first job, they can attract some of the best talent on the market." 

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Another hurdle Mesa hopes to tackle through HomeVest is financial literacy and responsibility. By creating a system where employees don't have to personally take the extra step to move portions of their paycheck into auxiliary accounts, they can't miss payments or have  access to that sum to use elsewhere.

As of now, Mesa is concentrating his efforts in industries that are seeing the most employee turnover and could use more comprehensive benefits to attract and retain talent, such as healthcare, hospitality and small businesses. The goal is to continue to grow HomeVest until it's a more robust offering that includes services like mortgage support in order to compete with other supplementary benefits on the market.  

"This is where the market is  heading," Mesa says. "The homebuying process is so overwhelming right now, but it's worth the trouble with the right support."