Why Owning a Home Feels Like a Dream Out of Reach for Younger Americans

Jessica Williams
Published Mar 25, 2025


Many people in the United States who don’t own homes are losing hope that they’ll ever be able to afford one. A survey from Northwestern Mutual, a life insurance company, found that over half of these folks (53%) believe that buying a home is just too expensive for them.

Although this survey didn’t compare the situation to previous years, other studies have shown that it’s getting tougher for people buying their first home. In fact, the National Association of Realtors noted that the average age of homebuyers is going up – from 49 to 56 in just one year, and for first-time buyers, from 35 to 38.

This suggests younger Americans, like those in Generation Z and the millennial group, are finding it especially hard to enter the housing market mainly because they don’t have enough money saved up.

Housing prices have skyrocketed, making the situation even more challenging for young people. Real estate website Realtor.com reported that as of February, the average list price for a house was $412,000, marking a 39.2% increase since 2019. Even the cost per square foot has jumped by 54.8%.

Another hurdle is the mortgage rate (the interest rate you pay on the loan you take out to buy a house) which, despite a slight decrease, remains high, making loans more expensive.

For example, the rate for a 30-year mortgage was around 6.65%. On top of that, due to ongoing high inflation, there's talk of keeping interest rates high for a while longer, which doesn’t help potential buyers.

People are feeling the pinch from inflation in general, which is eating into their savings—savings they might otherwise put towards buying a home.

According to the survey, the main reasons people feel they can’t afford a home include not having enough saved for a deposit, high mortgage rates, and a very competitive housing market.

Interestingly, there’s a bit of a split in optimism based on age. While 58% of millennials think owning a home isn’t realistic for them financially, a smaller percentage (49%) of Generation Z feels the same way.

It might be because Gen Zers, being younger, have more time to save and prepare for homeownership.

This situation presents a grim view for many aspiring homeowners, especially the younger generation, as the dream of owning a home becomes increasingly difficult to achieve.

So, if you’re feeling disheartened about buying a home, know you’re not alone. Many share your concerns, hindered by high prices, steep mortgage rates, and a challenging market. But, perspectives can change with age, especially as you have more time to plan and save.

Government programs like FHA loans allow for down payments as low as 3.5%, while many states offer their own grants and low-interest loans for first-time buyers. 

Check out: Down Payment Strategies for First Time Homebuyers

Despite these options, awareness remains low, underscoring the need for better outreach to help potential buyers access available assistance.

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