Homes are just too expensive.
That’s the sentiment from young people according to a new survey from Redfin, a real estate firm and website. Almost 1 of every 5 millennials and Gen Zers who replied to a recent housing survey believe they will never own a home.
The report surveyed 1,340 Gen Z respondents, aged 18 to 26, and 1,973 millennials, aged 27 to 42. They were asked, “Do you believe that you will ever own your own home in the future?”
Lack of affordability is the No. 1 barrier to homeownership for young Americans, according to the report. About half of Gen Z and millennial renters who believe they’re unlikely to purchase a home in the near future say the high price of homes on the market is blocking them from buying.
Several other affordability-related reasons were also cited as factors, including their lack of ability to save for a down payment, and mortgage rates being too high. Some also said they’re unable to afford monthly mortgage payments alongside their student loan payments.
Rising home prices means more home equity for homeowners
American homeowners now have an average of $200,000 in equity.
The survey was fielded to 5,079 U.S. residents who either moved in the last year, plan to move in the next year, or rent their home.
“It’s been really rough for young buyers,” said Max Stokes, an agent with Compass Real Estate of New Jersey. “They’re getting squeezed from all angles.”
Rent is rising along with home prices, Stokes said, noting it’s difficult to save for a down payment with rising rents. The national median rent price is now $2,038. Since Feb. 2023, when rents bottomed out at $1,936, prices are up nearly 5%, according to Rent.com. Meanwhile, the median home sale price rose to $406,700 in July according to the National Association of Realtors, the second month in a row that it’s been above $400,000, and 45% higher than July of 2019 before the pandemic.
