Young adults sour on homeownership as affordability falls
Pew, Gallup and academic research point to a widening break between younger Americans and the traditional goal of owning a home.
By Hana Yoshida · Markets Reporter
3 min read
Younger Americans are losing confidence in homeownership as a path to financial security, according to recent surveys and research. The shift matters because buying a home has long pushed households to save, build credit and accumulate wealth.
A Pew Research Center survey published last week found that nearly 90% of U.S. adults under 40 say purchasing a home is harder for them than it was for their parents. Pew also found that affordability has deteriorated sharply for younger renters: 56% of renter households under 40 could afford the monthly cost of owning a home in 2019, compared with 37% in 2024.
The price-income gap helps explain the change. Federal Reserve data cited in the research show the median U.S. home price near $400,000, more than 20% above its 2019 level, while median household income has been roughly flat over the same period.
Views on housing as an investment are also splitting by age. Pew found that 24% of Americans under 40 describe buying a home as a very good investment, compared with 38% of adults ages 60 and older.
Homebuying expectations are falling
The broader idea of the American Dream has also weakened among young adults. A 2024 Pew survey found that Americans ages 18 to 29 were the least likely age group to say the American Dream remains attainable and the most likely to call it out of reach.
Gallup polling published in April showed that 25% of non-homeowners expect to buy a home within five years, the lowest level since Gallup began asking the question in 2013. Among non-homeowners ages 18 to 34, 29% said they expect to buy within five years, down from 53% a decade earlier, according to Gallup.
Gallup also found that the share of young non-homeowners who do not expect to buy a home in the foreseeable future has more than doubled over that span. That suggests the affordability problem is changing financial expectations, not only delaying purchases.
Research links housing pessimism to money habits
A paper published last year by researchers at Northwestern University and the University of Chicago found that lower expectations of future homeownership are associated with higher consumption relative to wealth, less work and riskier investing.
The researchers estimated that people born in the 1990s are on track to retire with a homeownership rate 9.6 percentage points lower than their parents’ generation. They also found that people who have lost hope of buying a home tend to carry larger credit card balances, show lower engagement with work and pursue more volatile investments, including cryptocurrency, compared with homeowners of similar net worth.
The paper argues that the goal of buying a home can shape financial behavior. Households preparing to buy typically need to save for a down payment, maintain credit and reduce debt; separate research on saving psychology has found that concrete goals can improve savings habits among young people.
Some buyers who do enter the market are showing signs of strain. VantageScore, a credit scoring company, reported earlier this year that mortgage payments more than 90 days late rose 18.6% in December from a year earlier, a faster increase than delinquencies for auto loans or credit cards.
Research from the Mortgage Bankers Association suggests demographics could eventually ease pressure, as baby boomers gradually leave the housing market and create more available homes for smaller younger generations. For adults already in their prime homebuying years, that possible relief may arrive too late to change near-term choices.
This story draws on original reporting from Fortune.