Nearly two-fifths of Americans living in rental properties now believe that they will never be able to afford a home, a new survey has found, up from roughly one-quarter less than a year ago. According to a survey conducted in February 2024 by real estate brokerage firm Redfin, 38 percent of renters have completely given up on “the American dream of homeownership.”
During the study, 1,000 renters were asked: “Do you believe that you will ever own your own home in the future?” and “Which of the following are reasons you aren’t likely to purchase a home in the near future?”
Among those who answered the first question in the negative, lack of affordability proved to be the biggest obstacle to homeownership, with 44 percent of respondents in this category indicating that available homes are too expensive. Other leading reasons for continuing to rent include ability to save for a down payment (35 percent), ability to afford mortgage payments (33 percent) and high mortgage rates (32 percent).
Just 14 percent of respondents said they are not interested in owning a home.
These results show a strikingly negative shift in outlook among renters since just last year, when a similar survey between May and June 2023 found that only 27 percent of renters felt that a home was out of their reach.
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Redfin attributes the double-digit increase in this metric to “the one-two punch of high home prices and high mortgage rates.” First-time homebuyers need an average salary of $76,000 to afford a starter home, up 8 percent from last year and almost 100 percent since before the pandemic. During the height of the COVID-19 lockdowns, demand for homes skyrocketed even as the supply of available properties fell, and average home prices are up over 40 percent since 2019.
At the same time, rates on 30-year fixed mortgages are currently at 6.62 percent, more than double the record low seen in 2020. In the last year, home prices have risen by 7 percent and monthly mortgage payments by 10 percent, which directly contributes to the year-over-year difference in the survey results.
Related: Renting is Cheaper than Buying a Starter Home in Top 50 US Metro Areas
However, as the survey indicated, even renting is not a perfect long-term solution. Nearly 25 percent of respondents also reported that they regularly struggle to make their monthly rental payments. Rental costs have been equally elevated since the pandemic, with the average asking price for an apartment sitting just shy of $2,000 per month.
Broken down by generation, members of Gen Z (born between the late 1990s and early 2010s) are surprisingly the most optimistic about their home-owning prospects. Just 8 percent of Zoomers believe they’ll never own a home, compared to 22 percent of Millennials, 40 percent of Gen X, and 81 percent of Baby Boomers. This is likely due to the fact that the oldest members of Gen Z (currently aged between 18 and 27), have just entered the early stages of their careers, as opposed to Boomers approaching retirement.
Connor Walcott is a staff writer for Valuetainment.com. Follow Connor on X and look for him on VT’s “The Unusual Suspects.”
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