Study Finds 72% Of Renters Think They’ll Never Have Enough Money To Buy A Home
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To many Americans, the American Dream of home ownership is quickly becoming an American pipe dream.
Homeownership has long been considered a cornerstone of the American Dream. A roof over your head that you hold the deed to is a symbol of economic security and upward mobility, representing the promise of stability and a better life.
However, for many young Americans today, this dream is becoming increasingly out of reach.
The housing market has seen a significant drop in inventory and a steep rise in home prices, which is making it difficult for many to achieve their dream of having a home that they can call their own. In addition, factors such as stagnant wages, high levels of student debt, and a lack of affordable housing options have made homeownership even more daunting.
Let’s break down the numbers:
In March 2023, house prices rose in 92% of markets compared to February, according to the Black Knight Home Price Index. While some home prices in markets like California and Utah are lower than they were last March, other markets like Miami were up 15% compared to last year.
In 2022, the median sale price for a home in the United States was $428,700. Home prices increased by a stagger 30% from 2020 to 2022. In fact, when you zoom out even longer, the median home price in the U.S. increased by 416% from 1980 to 2020 – roughly over the course of two generations of home owners.
Fewer people think owning a home is part of the American Dream
According to a new Home Bay survey of 1,000 renters in the United States, 61% of respondents say that Gen Z and millennials will never reach the same rates of homeownership as baby boomers. Only 51% of renters in the survey say that owning a home is “very important” to them.
Most renters in the Home Bay survey report the following responses:
- 86% of respondents feel that home prices are too expensive nationwide.
- 77% of renters believe that the US is experiencing an affordable housing crisis.
- 76% of renters feel that owning a home is not affordable for the average American.
- 72% of renters thought they would be homeowners by now, but have been unable to achieve this goal.
- 61% of renters believe that Gen Z and millennials will never reach the same homeownership rates as baby boomers.
- Despite their financial challenges, 58% of renters still regularly browse home-buying websites, indicating a strong desire for homeownership.
73% in the survey say they can’t afford to put any money toward a down payment.
While part of the problem is rising prices for houses, the other part is stagnating wages. The Hot Bay survey found that 72% say they’ll never be able to own a home because they don’t make enough money.
Renters also report that they need to make $74,219 a year to afford the average home in 2023.
Meanwhile, that might not be enough. A staggering 73% of recent homeowners have reported they regret buying a house, mostly due to unforeseen costs associated with home ownership.
However, renters still want to buy a home
Because home ownership is so generationally-ingrained as a path towards building wealth and financial freedom, many renters still aspire to own a home sometime.
According to the Home Bay survey, renters expressed the following:
- 83% of respondents feel that they deserve to own a home.
- 72% of renters believe that their income will prevent them from ever owning a home.
- 71% of renters feel that owning a home is important for building generational wealth.
- 69% of renters have parents who were or are homeowners.
- 66% of renters feel hopeless due to the current high prices of homes.
- 56% of renters believe that owning a home is unattainable for the average American.
The reality, however, is bleak. Renters in the survey think the average sale price of a home in 2023 is $397,800 – off by about $140,000 from the average of $535,800.
Many renters also say they are willing to work a side gig or second job (63%), along with sell plasma (31%) or skip meals (29%) to actually afford a home that’s their very own.
Being debt-free is the new American Dream
The housing market is grim, and the prospect of home ownership for many is dire. But the survey found an interesting conclusion about how many renters are prioritizing their finances.
According to Home Bay, renters are more likely to rank being debt-free (71%) and having a comfortable retirement (66%) as important milestones.
This outranked owning a car (59%) and owning a home (51%) as a financial priority.
In conclusion, the survey results suggest that while owning a home is desirable, the high costs and limited accessibility of homeownership in the current market are leading many Americans to question its value. After all, financial stability and security are ultimately more important than the mere status symbol of homeownership, especially if numbers don’t add up for one’s personal financial situation.