The ongoing lack of housing affordability is prompting more renters to doubt their ability to become homeowners. According to a recent Redfin survey, nearly 40% of U.S. renters don’t believe in their ability to ever own a home, up from roughly 27% less than a year ago.

While lack of affordability is the dominant reason for renters to believe they’re unlikely to become homeowners, nearly half of renters feel that available homes are too expensive. Among other reasons preventing renters from becoming homeowners, respondents listed the difficulty of saving for a down payment (35%), the challenges of affording mortgage payments (33%) and high mortgage rates (32%). Lastly, a slim portion of respondents (14%) were not interested in owning a home.

Redfin commissioned Qualtrics to survey 3,000 U.S. residents, including about 1,000 renters, in February 2024.

During the four weeks ending April 7, the median monthly U.S. housing payment hit $2,747, up 11% from a year earlier, according to a different Redfin report. The median sale price was $378,250, up 4.5% year over year, while the average 30-year fixed mortgage rate was 6.82%. 

The one-two punch of high home prices and high mortgage rates have pushed homeownership out of reach for many Americans. On average, first-time homebuyers must earn $76,000 to afford the typical U.S. starter home, up 8% from a year ago and up nearly 100% from pre-pandemic figures, Redfin reported.

In the past year alone, home prices grew by 7% and monthly mortgage payments rose more than 10%. 

“Housing costs are high across the board, but renting is a more affordable and realistic option for many Americans right now — especially those who have never owned a home and aren’t able to tap into equity from a previous sale,” Redfin chief economist Daryl Fairweather said in a statement. 

“While owning a home is usually a sound long-term investment, the barriers to entry and upfront costs of buying are higher than renting. Buying typically requires a sizable down payment and approval for a mortgage — things that are difficult for many people today, when the typical down payment is near $60,000 and mortgage payments are sky-high. The sheer expense of purchasing a home is causing the American Dream of homeownership to lose some of its shine.”

Broken down by age groups, Generation Z renters emerge as the most optimistic cohort regarding their prospects of eventual homeownership. Only 8% of Gen Z renters harbor doubts about their ability to own a home, contrasting with 22% of millennials, 40% of Gen Xers and 81% of baby boomers who share similar apprehensions.

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