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Middle-income renters increasingly view homeownership as out of reach due to rising prices and commitment fears

A survey by Neighbors Bank found that nearly 60% of middle-income renters believe the dream of homeownership is currently out of reach. While 44% of these renters earn more than their parents did at the same age, home prices have risen significantly faster than incomes over the last several decades. From 1990 to 2024, median sales prices for existing homes increased by more than 320%, while incomes rose by approximately 180% during the same period. Many potential buyers are deterred by the high cost of homes, high mortgage rates, and increased property taxes and insurance. Some renters also express concern about the commitment of owning a home, fearing they may be stuck in one location for several years. Additionally, a large majority of middle-income renters are unaware that a down payment can be as low as 3% to 3.5%, with many believing a 20% down payment is equal to a requirement. Data from Gallup shows that expectations for homeownership are shifting among younger adults. Among those aged 18 to 34 who are not homeowners, only 29% expect to buy a house within five years, a significant decrease from 57% who held that same expectation in 2015.

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