Homeownership may now seem impossible for many Americans, as over 60% said they do not feel financially capable of owning a home.
As of August, a home in the US sold for a median price of $433,229. To comfortably afford a median-priced home, hopeful buyers must earn at least $80,000 annually. However, the average American worker earns $1,143 per week, which totals to only $59,436 per year as of the second quarter of 2024, according to data from the US Bureau of Labor Statistics (BLS).
In comparison, the average monthly rent is $1,406, per the recent American Community Survey.
Can Americans Afford a Home in Today's Market?
With those numbers in mind, Lance Surety Bonds surveyed 1,013 renters across the US and asked whether they thought owning a home is still possible in today's market. At least 66% of Americans said they don't feel capable of owning a home and believe renting is currently the only viable option.
Gen Z respondents had the bleakest outlook on homeownership by generation, with 75% saying they see renting as the only option in today's housing market. In comparison, only 68% of millennials, 64% of Gen Xers, and 53% of baby boomers shared a similar sentiment.
Why Americans Prefer Renting To Owning a Home
In addition, the Lance Surety Bonds study also asked participants whether they are still planning to buy a home in the future. One in eight respondents said they plan to rent indefinitely, with baby boomers (37%) most likely to skip buying a home.
Furthermore, the study asked participants why they preferred renting to owning a home. The top answer (53%) was the inability to afford a down payment. For perspective, the conventional down payment (20%) for a median-priced home would be $86,645.
Other reasons cited by respondents for preferring to rent included high mortgage rates (43%), desire for flexibility in living arrangements (35%), preference for less responsibility (33%), and belief that housing costs are more expensive for homeowners than renters (29%).
Conversely, 71% of Gen Zers said they plan to buy a house.
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