Affording the American Dream: Housing Prices Across the Country
As home prices climb and financial pressures mount, the quest for homeownership may increasingly feel like chasing a mirage. To further explore this relationship, we conducted a proprietary survey and analyzed the subsequent data to help understand the shifting sands of the housing market and the growing challenges faced by those striving to achieve the American Dream of owning a home.
Key Findings
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80% of Americans believe homeownership is becoming increasingly out of reach in today’s market.
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3 out of 4 people now feel that working over 40 hours a week is necessary to fund homeownership.
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37% of Americans idea of an affordable home costs less than $100,000.
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3 out of 4 Americans feel that their current income falls short of what’s needed to purchase a home in their area.
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77% are willing to relocate in search of more affordable housing.
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67% of Americans are frustrated with the home prices in their local markets.
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Less than 3% of Americans believe they can save enough for a down payment within a year, and nearly 70% expect it will take at least four years to save.
The Shifting Landscape of Homeownership
In today's economic climate, many people still dream of owning their own home — though many find this goal increasingly out of reach. Numerous factors contribute to this challenging reality, including high property prices, stringent lending standards, and stagnant wages. These obstacles make it difficult for many potential buyers to enter the housing market.
Despite these hurdles, a significant portion of non-homeowners are willing to make substantial sacrifices to achieve homeownership. Our survey found that 61% of Americans are open to taking on additional work, such as second jobs or other gigs, to afford the costs associated with buying and maintaining a home.
Compared to previous generations, today's homeownership challenges are far more daunting. 88% of Americans believe homeownership was more attainable for their parents.
Economic Realities and Perceptions
The rising cost of living is a major concern impacting homeownership. We found that 95% of Americans believe the cost of living continues to rise each year. Rising energy costs and increased living expenses are contributing significantly to financial instability and impacting homeownership. 87% of our respondents feel that achieving the American dream is now more challenging than ever before.
Looking to the future, there is a prevailing concern about the prospects for the next generation. Approximately 84% of Americans believe younger generations will face even greater challenges in buying a home. Another significant factor is the influx of new residents, which many blame for driving up housing prices. About 61% of respondents think that this increase in population is making homes less affordable.
Additionally, there are varying perceptions about what constitutes affordable housing. A considerable 37% of respondents believe that a house should cost less than $100,000 to be considered affordable.
Financial Hurdles to Homeownership
The journey to homeownership has some significant financial obstacles. Here are a few key barriers that stand out:
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High cost of living: 75% of respondents identified this as a major challenge, reflecting the increasing expenses that make saving for a home more difficult. The Consumer Price Index revealed that inflation has driven up the cost of shelter by 5.1% in 2024.
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Saving for a down payment: 58% noted this as a critical hurdle, highlighting the struggle to accumulate the substantial funds needed upfront. The typical homebuyer today needs a 35% down payment — far higher than the traditional 20% — due to rising home prices.
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Low income or job instability: 44% cited this as a concern, pointing to the instability that undermines long-term financial planning for homeownership. Wage growth in the U.S. has slowed, with average hourly earnings increasing by just 0.9% in the second quarter of 2024, further limiting workers’ ability to save for a home. Long-term, employers have only increased wages by an average of 0.8% from 1982 to 2024.
Another significant challenge is the lack of family financial support. A staggering 76% of potential homebuyers do not have the financial backing of family members, making it even harder to financially afford a home.
The issue of insufficient income is a pressing concern. 74% of Americans expressed that their current income is inadequate to meet homeownership requirements. This earnings gap emphasizes the affordability issue and the need for more accessible pathways to homeownership.
The Current Housing Market: Perceptions and Realities
High home prices are perceived as the most significant barrier to home ownership. Nearly 40% of respondents cite the high cost of buying a home as their biggest obstacle. A substantial 2 out of 3 Americans are disappointed with the current housing prices in their area. This highlights the gap between home prices & buyers' expectations or financial means.
In response to these challenges, 50% of respondents say increasing the availability of affordable housing options is the most effective solution for more attainable home ownership.
Our research showed that most Americans would favor a mortgage interest rate of less than 4%. This suggests that lower interest rates are a crucial factor in making home ownership more affordable and achievable.
Work-Life Balance and Homeownership
There’s a prevailing perception that you have to work overtime to afford a median-priced home. This belief reflects a growing concern that the cost of home ownership requires significant financial sacrifice. Many individuals feel that achieving the financial stability they need to purchase a home necessitates a level of work intensity that can disrupt their work-life balance.
75% of respondents believe a person needs to work more than 40 hours a week to afford a house. These findings echo the widespread belief that the current housing market demands significant work effort, straining households, and affecting their quality of life.
Adaptability and Creative Solutions
Adaptability and creative solutions are becoming essential for homebuyers navigating financial challenges. 77% of survey respondents expressed a willingness to relocate to more affordable housing options, highlighting strong flexibility in finding cost-effective solutions.
Willingness to move suggests there are individuals prioritizing financial stability over geographic familiarity, which can lead to notable shifts in population density and housing demand across different regions. This emerging trend highlights a broader pattern. People’s financial considerations are driving changes in their housing preferences and locations. These shifts can influence regional housing markets and demographic distributions, reflecting a dynamic response to financial needs and opportunities in the housing sector.
The U.S. Census Bureau reports that the number of state-to-state movers increased from 7.9 million in 2021 to 8.2 million in 2022, reflecting a decade-long upward trend in this type of migration despite a general decline in overall migration numbers.
At the same time, 63% of respondents indicated that remote work opportunities have not made homeownership feel more realistic for them. Despite the increased flexibility of work locations, financial barriers continue to be a significant challenge. This disconnect underscores the ongoing struggle for many to bridge the gap between income and the rising costs of homeownership.
Housing hacks, such as co-living arrangements or renting out parts of your home, have gained traction. 62% of Americans are open to housing hacks if it means they can afford their mortgage payments. This trend shows that people are becoming more creative in addressing the challenges of homeownership. As these unconventional methods become more common, they could influence broader housing market trends and reshape community structures.
As more people consider relocating or adopting unconventional methods to afford homes, shifts in housing demand and the evolution of new community dynamics may follow. With more buyers seeking communities that offer both affordable homes and diverse neighborhood options, online resources can play a crucial role in finding the right fit.
Planning for the Future: Homeownership Timeline
When planning for homeownership, many individuals place a significant emphasis on savings and financial improvements before making a purchase. Our study shows that 20% of prospective buyers prioritize financial preparation, reflecting a cautious approach to home buying. This focus often includes building a substantial down payment, improving credit scores, and ensuring stable income. The preparatory phase may ultimately lead to more informed purchasing decisions.
As individuals prepare financially for homeownership, their decisions impact both the timing of their purchase and the broader housing market.
Delayed homeownership, particularly among young adults, has not significantly reduced home prices as you might expect. Many young adults are delaying their home purchases due to a tight housing supply, which has kept prices high across the U.S. Additionally, strong demand from buyers who delayed homeownership during the pandemic has compounded existing supply challenges, pushing prices even higher in many markets.
Further, as more individuals choose to rent instead of buying, rental demand can increase, leading to higher rental prices. A rise in rental costs can create affordability challenges for renters. Overall, these dynamics show how individual decisions about homeownership can affect both the housing market and broader economic conditions over time.
Strategies for Achieving Homeownership
A significant hurdle for aspiring homeowners can be the down payment. Our survey results found that less than 3% of Americans felt capable of affording a down payment within a year, showcasing the financial strain many face in saving enough for this initial investment. This underscores the importance of developing effective strategies to amass the necessary funds.
If you’re looking to alleviate some of the stress that comes with home ownership, you’ll benefit from following these actionable tips for saving for a down payment:
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Set a savings goal: Determine the amount you need for a down payment, typically 20% of the home price, and establish a clear savings target. Knowing the goal can help you maintain focus and motivation throughout the process.
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Create a budget: Track income and expenses to identify areas for cost reduction, directing more funds toward the down payment. A well-structured budget maximizes savings potential.
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Automate savings: Set up automatic transfers to a dedicated savings account to ensure consistent contributions. Automation can help you avoid the temptation to spend money meant for savings.
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Reduce unnecessary spending: Evaluate and cut non-essential expenses, such as dining out, subscriptions, and impulse purchases. Cutting back on non-essentials can help you significantly speed up savings growth.
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Increase income: Explore side jobs, freelance work, or selling unused items to boost savings. Additional income streams can quickly accumulate, bringing the savings goal closer.
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Take advantage of windfalls: Allocate bonuses, tax refunds, or unexpected income directly to the down payment savings. Using these extra funds can provide you with a substantial boost to savings.
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Explore down payment assistance programs: Research local or national programs offering grants or loans to assist with your down payment. These programs can reduce the amount you need to save, making homeownership more attainable.
Additionally, various government programs and assistance options are available to support first-time homebuyers. These programs offer grants, low-interest loans, and other forms of financial aid to make homeownership more accessible. Qualifying for these programs can help you ease the financial pressures associated with purchasing a home.
Alternative homeownership models, such as rent-to-own or co-ownership, can also provide viable pathways to owning a home. These models can offer more flexible terms and conditions, making it easier for you to transition from renting to owning, or to share the financial responsibilities of homeownership with a partner or co-investor.
The Future of the American Dream
In 2025, the American housing market is expected to undergo significant shifts, with respondents to our survey expressing varied priorities. As mentioned earlier, the top priority, chosen by 20% of survey participants, is saving money and improving finances so that they can afford a home. This emphasis on financial stability reflects broader economic concerns and uncertainties that are shaping consumer behavior.
The housing market and homeownership trends are also poised for change as we move toward 2025. Rising home prices, driven by inflationary pressures, are causing potential buyers to reconsider their options, with affordability becoming a growing challenge in many regions. Some experts predict that these trends will continue to strain homeownership rates, leading to a greater demand for rental properties and alternative living arrangements.
The evolution of real estate technology, particularly in virtual tours, AI-driven property recommendations, and blockchain-based transactions, is reshaping how people buy and sell homes. This shift toward digital-first experiences allows buyers to explore properties remotely, access personalized home matches, and even streamline the closing process online. This makes the market more accessible and efficient for both buyers and sellers. Innovations in digital platforms and data analytics are transforming the landscape, potentially making it easier for buyers to navigate the market and real estate technology trends.
Evolving work patterns may impact housing choices in the coming years. The survey shows diverse working arrangements, from fully remote to hybrid, influencing living preferences. As remote work grows, demand for suburban or rural homes with more space and affordability may rise. Conversely, some may prefer urban areas for amenities and social opportunities. These changing preferences could reshape housing demand across regions.
Policy changes aimed at addressing housing affordability are also on the horizon, with the potential to significantly impact the market. As housing costs continue to rise, there is growing pressure on policymakers to implement measures that make homeownership more attainable. The effectiveness of these policies will play a crucial role in determining whether the American Dream of homeownership remains within reach.
Methodology
To draw meaningful conclusions about the current housing market and its effects on homeownership, we conducted a thorough analysis using data from a comprehensive survey of American respondents. We designed this survey to capture a wide array of perspectives from a diverse demographic, allowing us to gain valuable insights into how individuals perceive housing affordability and the financial hurdles they face.
By collecting detailed information on various factors such as income adequacy, the ability to save for down payments, and the impact of work-life balance on financial stability, we aimed to uncover significant trends and patterns that reflect the broader challenges and aspirations related to homeownership.
Through this meticulous examination of survey responses, we have been able to identify critical issues that influence the housing market and individual ability to secure homeownership. Our analysis highlights how economic conditions and personal financial situations intersect to shape the experiences of potential homeowners. This understanding is essential for addressing the current struggles many people face and for exploring viable solutions to make homeownership more accessible and attainable in today’s complex economic landscape.
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