A majority of renters now believe the American dream of owning your own home is now impossible, according to a new poll.
A new survey conducted by the Harris Poll Thought Leadership and Future Practice asked Americans who own a home or are renting for their opinion on homeownership in the country. Among renters, 81% said they want to own a house in the future. However, 61% of the group said they worry they will never be able to afford a home.
When asked about the barriers to homeownership, 50% of survey takers cited the current interest rates, while 51% said their lack of savings for a down payment. Other reasons cited by survey takers include poor credit scores (35%), lack of knowledge (30%), personal choice (25%), lack of available housing (23%), student loan debt (15%), and housing discrimination (12%).
To own a home, 71% of Americans said they would need to either be gifted money or inherit a fortune.
In addition to homeownership, 62% of renters polled said prices in their area have become "so unaffordable" that it is "barely livable." At least 75% said they believe rent prices will continue to increase this year.
"When you think about Maslow's hierarchy of needs, and housing is right at that foundational level of security, the implications on consumer psyche when things feel so unaffordable is something that will impact everyone," Libby Rodney, chief strategy officer at Harris Poll, told The Guardian. "[Homeownership] is looking more like a daydream for renters".
Housing Affordability in the US
The turbulence in the housing market began during the pandemic when interest rates were near zero. It was further exacerbated when the Federal Reserve hiked interest rates in the summer of 2022 in hopes of cooling down inflation.
The 30-year mortgage rate soared to 7.79% in October last year, marking a two-decade high. It has since cooled down to 6.88% as of the week ending March 7. Home prices have also posted a significant increase, with a typical house in the US now costing $344,159, according to Zillow.
Americans hoping to purchase a home today would need to make more than $106,000, an 80% increase from the annual household income needed before the COVID-19 pandemic.
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