Owning your own home has long been considered part of the American Dream — but a recent survey released by Freddie Mac shows that more Americans feel that dream is out of reach.
According to the survey conducted by Freddie Mac, American renters are feeling less optimistic about their chances of ever owning a home of their own. Here are some key findings from the study.
- Only 24% of renters think it’s “extremely likely” they’ll ever own a home, down from 35% in 2015
- An overwhelming majority of renters — 82% — said renting is cheaper than owning, up from 67% of February of last year
- Nearly half of renters who moved in the past two years — 44% — said they had to move within the past two years because they could no longer afford to pay rent
- More than half (51%) of younger millennial renters, ages 23 to 29, had to make a different housing choice because of their student loans
Want to know more?
Why do renters feel homeownership is out of reach?
Median new-home prices vary widely across the U.S. — from under $300,000 in the South to nearly half a million dollars in the Northeast. But home prices have been trending upward over the past few years across the U.S. — and internationally.
And home prices have been rising faster than the rate of wages and inflation. In fact, 80% of millennial renters, 81% of Gen X renters and 71% of baby boomer renters said not having enough money for a down payment or closing costs was an obstacle to homeownership, according to the Freddie Mac survey.
Add to that the crippling student loan debt many face, and it’s no wonder that homeownership rates among millennials are especially low — and falling among Gen Xers — according to the Freddie Mac survey.
What can renters do about it?
There are many fees associated with buying a home, so it’s understandable that many feel homeownership is out of reach. But there are resources out there that can help if you’d like to take the first step from renting to owning a home.
- If you’re worried about having enough money saved to buy a home: Check out these tips on how to save for a down payment.
- If you’re confused about mortgage options: It’s important to remember that there are options out there, and so there may be a mortgage that can meet your needs. The Consumer Financial Protection Bureau offers resources that explain the different types of mortgage options. And the Federal Housing Administration offers resources that explain FHA mortgage options, too. You could also consider checking with your local credit unions, which might have options for first-time buyers.