Nearly two in five (38%) renters don’t believe they’ll ever own a home, according to a new survey by Redfin (NASDAQ:RDFN). This is up from roughly one-quarter (27%) less than a year ago.
Nearly half (44%) of renters who don’t believe they’ll buy a home in the near future said their pessimism was because homes are too expensive. The next most common obstacles cited were not being able to save for a down payment (35%), the challenge to afford mortgage payments (33%) and high mortgage rates (32%). Roughly one in eight (14%) said they were not interested in owning a home.
Broken down by generation, Gen Z renters were the most likely to believe they will become homeowners – only 8% of Gen Z renters believed they’ll never own a home, compared to 22% of millennials, 40% of Gen Xers and 81% of baby boomers.
The data is based on a Redfin-commissioned survey of roughly 3,000 residents, including about 1,000 renters, conducted by Qualtrics in February.
“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,” said Redfin Chief Economist Daryl Fairweather. “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.”
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