BAM Key Details:
- According to a recent report by Home Bay, 72% of renters believe that homeownership will never happen for them.
- Survey participants cited inflation and interest rates as the main reasons for the lack of affordable homes in today’s market.
- While renters have a pessimistic view of their chances at homeownership, many are willing to think outside the box in order to buy a home.
Has owning a home gone from the American Dream to Pipe Dream? The vast majority of renters think so.
The report surveyed 1,000 renters across the United States to gauge their sentiments about the current housing market. Let’s take a closer look at the findings.
By the Numbers: Homeownership Sentiment Among Renters
Here’s a quick look at insights found from Home Bay’s survey:
- 85% of renters want to own a home, but 72% say they’ll never have enough money to buy one.
- 66% of renters say home prices make them feel hopeless.
- 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.
- 61% of renters say Gen Z and millennials will never reach the same homeownership rates as baby boomers.
- 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%).
- 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.
- 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.
Renters Rank Being Debt-Free as More Important than Homeownership
When asked about the most important milestones, being debt-free came in at number one. Perhaps surprisingly, homeownership was fourth on the list:
This shows that, at least in the current economy, renters are putting financial stability over traditional milestones like homeownership and having children.
Affordability is the Biggest Hurdle to Homeownership
Renters are pessimistic about the current housing market, with 72% stating they’ll never be able to own a home because they don’t make enough money.
On average, survey participants cite affordability as the number one reason they won’t be able to buy a home, stating they’d need to earn an additional $74,219 annually to afford the typical home in today’s market.
Renters Blame Inflation and Interest Rates for the Lack of Affordable Housing
So, what’s the cause of the lack of affordable housing? Renters surveyed believe the top two things to blame are inflation and interest rates.
Renters Don’t See an End in Sight
The majority of those surveyed (64%) believe that home prices will continue to rise over the next year. And 77% believe that the cost of living will continue to increase—making it even more difficult to save for a home.
Ready to do whatever it takes
Many renters who want to become homeowners are open to thinking outside the box in order to become homeowners, with 68% putting rent-to-own at the top of the list.
Top Takeaways for Real Estate Agents
Buyers are feeling burnt out and frustrated by today’s market. When following up with buyers, lead with empathy and understanding.
From there, deliver value that will help them move forward to their dream of homeownership. This can include helping them find down payment assistance programs, being proactive with new inventory and coming soon properties, or sharing updates with mortgage rates and how it affects their monthly payments.
And remember that sometimes, the most important thing you can do is be the positive voice that keeps them moving forward in their search.