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Homeownership in 2023: High Prices Erode the American Dream

Home prices are making the American dream of homeownership unaffordable in 2023.

🏠 🇺🇸 Do Americans still believe in homeownership? 🇺🇸 🏠

About 72% of renters in the U.S. say they’ll never have enough money to own a home, and just 65% say homeownership is part of the American dream.

Homeownership & the American Dream | Most Important Milestones | Unaffordable Prices | Renters’ Pessimism | Sacrifices to Own a Home | Assigning Blame | The High Cost of Rent | Predicting the Market | Homeownership in a Recession

Young Americans’ hopes of owning a home are fading faster than the latest TikTok trend. 

More than 3 in 5 renters (61%) say Gen Z and millennials will never reach the same homeownership rates as baby boomers, according to a new survey of 1,000 American renters from Home Bay.

The findings illustrate profound pessimism regarding the modern housing market, which has seen inventory drop 60% and prices rise 50% since 2016.

Homeownership is still a goal for 85% of renters, but many are adjusting their expectations because of high prices, with 35% saying homeownership is not part of the American dream. 

Just 44% of renters believe homeownership is attainable for the average American in 2023 — and 2 in 3 (66%) say current home prices make them feel hopeless. 

Read on for more insights on homeownership and the American dream. 

🏘️ Homeownership and the American Dream Statistics

  • 35% of renters say owning a home is not part of the American dream — including 28% who say it used to be but isn’t anymore. Jump to section 👇
    • 61% of renters say Gen Z and millennials will never reach the same homeownership rates as baby boomers.
    • 77% of renters say the U.S. has an affordable housing crisis. 👇
  • Just 51% of renters say owning a home is “very important” to them, behind being debt-free (71%), having a comfortable retirement (66%), and owning a car (59%). 👇
  • 85% of renters want to own a home, but most (72%) say they’ll never have enough money to buy one. 👇
  • 66% of renters say home prices make them feel hopeless. 👇
    • 73% of renters say they can’t afford to put any money toward a down payment.
    • 56% of renters versus 39% of homeowners say owning a home is unattainable for the average American in 2023. 
  • 31% of renters are willing to sell their own plasma to help them afford a home, and 29% are willing to skip meals. 👇
    • 73% of millennials are willing to take on a second job to own a home. 
  • About 1 in 4 renters (24%) say they spend half their income or more on housing. 👇
    • 48% of renters say their landlord overcharges them for rent. 👇

More Than 1 in 3 Renters Say Homeownership Is Not Part of the American Dream

Unaffordable home prices have renters shifting their perception of what it means to achieve the American dream. More than 1 in 3 renters (35%) say homeownership is not part of the American dream in 2023.

Renters say homeownership:

  • Is part of the American dream (65%)
  • Used to be part of the American dream but isn’t anymore (28%)
  • Has never been part of the American dream (7%)

Younger renters are especially down on the dream. About 38% of Gen Z says homeownership isn’t part of the American dream — and 32% of Gen Z says there simply is no such thing as the American dream.

Renters are less likely to say homeownership is part of the American dream than other ideals, such as access to affordable health care, access to affordable education, and equality for all.

As prices climb and inventory falls, about 3 in 5 renters (61%) say Gen Z and millennials will never reach the same homeownership rates as baby boomers. Millennials currently trail baby boomers by about 30 percentage points in that metric.

Most renters say:

  • Home prices are too expensive nationwide (86%).
  • The U.S. has an affordable housing crisis (77%).
  • Owning a home is not affordable for the average American (76%).
  • They thought they would be a homeowner by now (72%).
  • Gen Z and millennials will never reach the same homeownership rates as baby boomers (61%). 
  • They regularly browse home-buying websites even though they can’t afford a home (58%).

Millennials are especially likely to say they regularly browse home-buying websites despite not being able to afford a home (66%). 

On the bright side, despite renters’ current predicament, most (69%) say it’s not too late for the U.S. to solve its housing crisis.

Being Debt-Free Is the Most Important Milestone to Renters — Not Homeownership

As renters lose faith in their chances of owning a home, just 51% of renters in 2023 say owning a home is “very important” to them. Renters are more likely to rank being debt-free (71%) and having a comfortable retirement (66%) as very important milestones. 

The most important milestones for renters are:

  • Being debt-free (71%)
  • Having a comfortable retirement (66%)
  • Owning a car (59%)
  • Owning a home (51%)
  • Reaching a six-figure income (45%)
  • Having children (40%)
  • Being promoted at work (39%)
  • Being married (37%)

The data shows an increasing emphasis on financial stability and a decreasing emphasis on conventional values of homeownership and building a family. The results further highlight the extent of Americans’ financial desperation in 2023.

72% of Renters Say They Will Never Be Able to Afford a Home

The shift in priorities among renters signifies not just a change in preference, but rather a re-evaluation of priorities to be more realistic. 

About 85% of renters still say they want to own a home at some point, but 72% say they’ll never be able to own a home because they don’t make enough money. 

Renters, on average, say they need to earn an additional $74,219 annually to afford the average home in 2023. Depending on their existing income — the median worker in the U.S. makes $54,132 per year — they might actually be underestimating how much they’ll need.

💰 How much income do you need to afford the average home in 2023? 💰

Many of today’s first-time buyers put about 10% down. With an average home price of $535,000, that leaves $481,500 on the mortgage. With a 6.5% interest rate, the monthly payment would be $3,812 after factoring in taxes and insurance. That’s $45,744 each year. 

Most experts recommend spending no more than 33% of your income on housing. To afford the average home at that rate, you’d need at least $138,618 in income

If you went for the somewhat more affordable median-priced home of $468,000, you’d still be looking at $3,336 per month — $40,032 annually — requiring an income of $121,309.

Predictably, affordability is the most common obstacle stopping renters from owning homes.

Renters say they don’t own a home because:

  • They can’t afford one in general (78%).
  • They can’t afford a down payment (72%).
  • High interest rates (71%).
  • They’re not ready to own a home (47%).
  • They have bad credit (46%).
  • They have too much debt (40%).
  • They plan on moving to another area (36%).
  • They’d rather spend money elsewhere (35%).
  • There’s a lack of home inventory in their area (31%).
  • They don’t want to contribute to gentrification (19%).
  • They never want to own a home (15%).

Just 15% of renters say they never want to own a home.

66% of Renters Say Home Prices Make Them Feel Hopeless 

Historically, experts recommended a 20% down payment. With the average sale price for a home in 2023 at $535,000, that would mean putting down a whopping $107,000. But most renters (73%) say they can’t afford to put any money toward a down payment. 

With no realistic way to afford a home, 66% of renters say home prices make them feel hopeless. That reality is especially painful to renters who have worked hard only to see their wages not keeping pace with home prices.

In fact, 83% of renters still feel they deserve to own a home. 

Renters say:

  • They deserve to own a home (83%).
  • Their income will prevent them from ever owning a home (72%).
  • Owning a home is important for building generational wealth (71%).
  • Their parents were/are homeowners (69%).
  • The current price of homes makes them feel hopeless (66%).
  • Owning a home is unattainable for the average American (56%).
  • They feel behind in life because they don’t own a home (52%).

Renters Underestimate Home Prices by About $140,000

Somehow, the outlook for renters might be worse than it sounds already. Most renters (76%) say homes are not affordable for the average American — but they’re actually underestimating the typical price. 

Renters think the average sale price of a home in 2023 is $397,800 — about $140,000 cheaper than the actual average of $535,800. 

The vast majority of renters (71%) underestimated the average price, with 41% even guessing the typical price was below $300,000.

Renters also underestimate the cost of maintaining a home and other non-mortgage costs. A study from Home Bay’s sister site, Real Estate Witch, found the average homeowner spent $17,459 on non-mortgage ownership costs in 2022. But 60% of renters believe it costs less than $15,000 annually to maintain a home.

Nearly 1 in 3 Renters Are Willing to Sell Plasma or Skip Meals to Own a Home

With most renters still wanting to own a home — but being light-years away from affording one — many are willing to make serious sacrifices to become homeowners. 

About 63% of renters, including 73% of millennials, say they are willing to take on a side gig or second job to afford a home. 

Even more shocking, 31% of renters — including 37% of Gen Z renters — are willing to sell their plasma to help afford a home. Talk about home prices bleeding people dry.

Another 29% of renters are willing to skip meals to help afford a home. 

Overall, the most common sacrifices renters would make to afford a home include:

  • Participating in a rent-to-own program (68%)
  • Taking on a side gig/second job (63%)
  • Buying a fixer-upper (58%)
  • Moving to a different state (50%)
  • Delaying major life events (e.g., wedding, having children, etc.) (46%)
  • Selling possessions (e.g., car, jewelry, etc.) (38%)
  • Moving further from work (i.e., a longer commute) (37%)
  • Selling their plasma (31%)
  • Moving to a less desirable location (30%)
  • Skipping meals (29%)
  • Borrowing money from family (28%)
  • Subletting part of their home (e.g., long-term lease, Airbnb, etc.) (27%)
  • Joining the military (i.e., to receive a VA loan) (16%)

Renters See Stability as the Biggest Benefit of Homeownership

For most, the biggest benefit of homeownership isn’t the opportunity to build wealth — it’s simply getting some stability and control over their lives. 

Americans say the biggest perk of homeownership is:

  • More stability (38%)
  • More privacy (19%)
  • Building wealth (18%)
  • More ability to customize (11%)
  • More space (11%)

Maybe it’s because they just moved away from home, but Gen Z (18%) is 2x as likely as millennials (9%) to point to customization as the biggest perk of homeownership.

Most Renters Blame Inflation and Interest Rates for the Shortage of Affordable Homes

Given the shortage of affordable homes, it’s no surprise Americans are looking for someone or something to blame. About 85% of renters blame inflation, while 84% blame high interest rates. 

Overall, the most common sources of blame for the lack of affordable homes are: 

  • Inflation (85%)
  • High interest rates (84%)
  • High property taxes (83%)
  • The federal government (74%)
  • State governments (73%)
  • Supply and demand (71%)
  • Banks (70%)
  • Real estate investors (66%)
  • Zoning laws/regulations (61%)
  • Home builders (58%)
  • Low inventory (58%)
  • NIMBYs (“Not in my backyard” — local homeowners resistant to new housing developments being built in their area) (55%)
  • Gentrification (55%)

Are renters right about who’s at fault? Although most point the finger at inflation, home prices have increased 42% since 2020, while inflation has increased just 16% in that same time frame

Finding the true culprit is more complicated, but many experts cite a mismatch between supply and demand, exacerbated by the buying surge of the pandemic.

1 in 4 Renters Spend at Least 50% of Their Income on Housing

For homeowners paying high prices, at least they get to build some equity. 

Renters, however, are stuck in a cycle of paying increasingly high prices to keep a roof over their heads. Since 2000, median rent prices are up 77%, while the median income has risen just 16%.

About 1 in 4 renters (24%) now say they spend 50% or more of their income on rent — yet the U.S. defines affordable housing as spending no more than 30%.

The numbers are especially painful considering 55% of renters believe renting is “throwing away money.” Additionally, 72% of renters expect rental prices to rise within the next year, while just 6% expect them to decline.

Many Renters Say They’re Overcharged — and Discriminated Against

In some cases, high rent prices are creating animosity between renters and their landlords. 

About 56% of renters — including 62% of Gen Z renters — say they’re generally suspicious of landlords. Another 48% of renters outright say their landlord is overcharging them for rent. 

High prices aren’t the only reason renters take issue with landlords and other housing gatekeepers. About 1 in 3 renters (34%) say they’ve felt discriminated against when looking for housing, with Black Americans 32% more likely than white Americans to say so. 

2 in 3 Renters Expect Home Prices to Be Even Higher a Year From Now

Most renters don’t anticipate better prices anytime soon. Despite talk of home prices slipping, about 64% of renters say they expect home prices to increase over the next 12 months. Even more (77%) expect the cost of living to rise. 

A 2023 Recession Could Change the Way Renters Feel About Homeownership

It’s clear that renters mostly want to own homes — and feel they’ll never be able to. But fears of a 2023 recession could change that. 

About 25% of renters say a potential recession would make them want to own a home less. That might be because home values often fall in a recession, hurting homeowners, while rent prices might also fall, benefiting renters.

Methodology

The proprietary data featured in this study comes from an online survey commissioned by Home Bay. One thousand U.S. renters were surveyed March 16-17, 2023. Each respondent answered up to 20 questions related to their views on homeownership, renting, personal finances, and other related topics. 

Are you a member of the media interested in learning more about our research? Feel free to reach out! Contact this article’s author here.

About Home Bay

Where your real estate voyage begins. Since 2014, Home Bay has helped thousands of readers confidently sail through their next home sale or purchase. In 2021, Home Bay was acquired by Clever Real Estate, a free agent-matching service that has helped consumers save more than $160 million on real estate fees. Research by Home Bay’s Data Center has been cited by The New York Times, CNBC, MarketWatch, NPR, Apartment Therapy, Yahoo Finance, Black Enterprise, and more.

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Frequently Asked Questions About Homeownership and the American Dream

Is homeownership still part of the American dream? 


More than 1 in 3 renters (35%) say homeownership is not part of the American dream in 2023. Renters are more likely to say being debt-free is very important to them, rather than homeownership. Learn more about renters’ priorities

Do Americans still believe in homeownership?

About 85% of Americans who rent say they want to own a home at some point, but 72% say they’ll never make enough money to afford one. Learn more about renters’ finances

Is homeownership attainable in 2023?

About 56% of renters say owning a home is unattainable for the average American in 2023, compared to 39% of homeowners. Learn more about why renters are losing faith in homeownership.  

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