More than half of homebuyers in the United States said the high cost of living is making it harder for them to afford a down payment and closing costs of purchasing a house, according to a new survey.
Bankrate surveyed 864 US adults in January 2024 who are aspiring to become homeowners. The survey included first-time homebuyers and those who have owned a home in the past but currently don't. All survey participants were asked why they could not afford the upfront costs of a home.
At least 51% said the cost of living is too high for them to afford a down payment and closing costs for a home. Another 54% said their income was not high enough to afford purchasing a home.
In addition, 18% of participants mentioned credit card debt, 15% said their friends or family cannot provide them with financial assistance, and 10% cited student loan debt as a barrier to homeownership. Only 13% of aspiring homeowners said nothing is holding them back from purchasing a house.
Among age groups, younger aspiring homeowners are more likely to cite a lack of financial assistance as an obstacle to homeownership. Millennials, specifically, are most likely to point to credit card and student loan debt as the obstacle to homeownership.
Is Homeownership Still Within Reach?
Apart from asking about the barriers to homeownership, Bankrate also surveyed potential buyers if they believe they could save enough to purchase a home in the near future. At least 20% of respondents said "never," while another 30% said it would likely take them more than five years to save up enough money for a down payment.
Among age groups, baby boomers (36%) and Gen Xers (28%) are more likely to believe they will never be able to save enough to buy a home. In comparison, only 18% of millennials and 10% of Gen Zers said they may never be able to save up for a home.
Median home prices have risen by 16% since 2020, according to recent data from the US Census Bureau. Buying a median-priced home worth about $417,700 on a 15% down payment would mean the buyer would need $62,655 upfront. The median US household income is $74,580, per the 2022 US Census data.
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