Redfin data shows that 38% of renters don’t believe they will own their home, up from less than 27% a year ago.
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Renters are becoming less confident about owning a home as house prices continue to climb and mortgage rates show no sign of falling, a new report shows.
this ReportA Redfin survey released Friday showed that 38% of renters believe they will never own their home, based on responses to 1,000 survey respondents in February 2024 and May 2023, up from a year ago. The proportion is 27%.
The main barrier facing renters is a lack of affordability, with 44% of renters who don’t believe they will own a home in the future because their current home is too expensive. The report says 35% don’t believe they can save for a down payment, 33% don’t believe they can afford a mortgage and 14% are not interested in owning a home at all.
Home prices have risen more than 7% in the past year alone, while monthly mortgage payments have simultaneously risen more than 10%, which partly explains why renters feel less optimistic about owning a home than they will in 2023.
“Overall, housing costs are high, but renting is a more affordable and realistic option for many Americans, especially those who have never owned a home and are unable to recover from a previous sale,” said Redfin’s chief economist. Someone who has gained a net worth,” Darryl Fairweather said in a statement.
“While owning a home is generally a sound long-term investment, buying has higher barriers to entry and upfront costs than renting. Buying a home often requires making a sizable down payment and getting approved for a mortgage — something that is difficult for many people today. It’s difficult because the typical down payment is close to $60,000 and mortgage payments are high. The sheer expense of buying a home is causing the American dream of homeownership to lose some of its luster.”
By generation, Gen Z renters are more likely than older renters to believe they will own a home, with only 8% of Gen Z respondents believing they will never own a home, compared to , 22% for Millennials, 40% for Millennials, and 40% for Millennials. Generation X and 80% of baby boomers.
This may be because Gen Z is in the early stages of their careers and has had more time to become homeowners than Millennials who are approaching or already in their 40s and may feel less hopeful about their opportunities .
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