The dream of homeownership feels out of reach for many American families.
The vast majority (86%) of current renters in the United States say they would like to buy a home — but can’t afford one, according to a CNN poll conducted by SSRS released Monday.
Among those same renters who can’t afford to buy a home right now, 54% think it’s unlikely they’ll ever be able to, the poll found.
The findings underscore the damage done by the one-two punch of surging home prices and elevated mortgage rates, creating an affordability crisis. And given that homeownership is the ticket to wealth generation in America, that pessimism exacerbates the risk that the divide between the haves and have-nots will only grow.
Younger people especially are having trouble buying a home right now. The CNN poll found that 90% of renters younger than 45 say they’d like to buy but can’t afford it, compared with 79% of those age 45 and above.
Not surprisingly, younger Americans are more hopeful that situation will change.
Most adults (53%) younger than 45 who want to buy but can’t afford it believe it’s at least somewhat likely they’ll eventually be able to buy a home. That’s compared with just 32% of those 45 and older.
‘Homeownership seems impossible’
Even some working parents in high-paying jobs are struggling to keep up with the spike in home prices.
Brent Bjornsen, a 39-year-old pediatrician and father of two in Phoenix is renting a home as he digs out from student debt.
“Buying a home is absolutely something we would love to do,” Bjornsen told CNN. “It seems out of reach.”
Bjornsen said his wife works part-time at an elementary school. The couple was dealt a financial setback when Hurricane Harvey flooded their Houston apartment.
“We’re straddled with seemingly insurmountable debt,” he said. “Homeownership seems impossible…and that hurts for two kids of Baby Boomers and feels like a disappointment.”
Two-thirds of Americans currently renting (68%) say their family owned a home when they were growing up, according to the CNN poll.
High rates. Even higher prices
The good news is that mortgage rates — one of the main obstacles to homeownership — have eased a bit. in recent months. And if the Federal Reserve is able to deliver interest rate cuts this fall and winter, rates could fall further.
However, home prices continue to rise. A price spike that began during the pandemic has pushed home ownership out of reach for many.
The median existing-home price climbed to a record of $426,900 in June, according to the National Association of Realtors. That was 4.1% higher than a year earlier and the second straight month of record home prices on data going back to 1999.
Among renters who want to buy but can’t afford it, 40% say the biggest barrier is saving for a down payment, according to the CNN poll.
Nearly a third (31%) say the biggest obstacle to buying a home is high interest rates. Just 17% say the inability to qualify for a mortgage is the biggest hurdle.
‘We have given up’
Jeremy Andersson, a digital marketing specialist living north of Atlanta, is among those Millennials who have lost hope.
“We have given up on homeownership,” Andersson told CNN.
The 40-year-old father of twin toddlers wanted to buy a home when his wife became pregnant in 2019.
“We felt the societal pressure to buy a house because that’s the American Dream, right? Have a family and buy a house,” he said.
Seventy percent of Americans call owning a home essential to achieving the American dream, the CNN poll found. That includes about two-thirds (65%) of those currently renting.
But like other families, Andersson and his wife were dismayed by what they could afford.
“I’m not going to pay $350,000 for a run-down house. It almost seems laughable. We can’t find anything affordable for a family of four,” he said. “I’m not going to play your game anymore. I’m done.”
In some markets, starter homes are fetching nearly three times that price.
$1 million starter homes
According to Zillow, the typical starter home is now worth $1 million or more in 237 cities. That’s up from just 84 cities in 2019 before Covid.
Perhaps that’s why many homeowners don’t think they’ll be able to buy in this market.
The CNN poll found that just about one-third (32%) of current homeowners think they could afford to buy a similar home in their neighborhood today.
Even among households earning $100,000 a year or more, most doubt they’d be able to afford to buy something similar today.
“We did everything we were supposed to do. We went to college. We did well. We got jobs. We’re not felons,” Andersson said. “I’ve worked my tail off and so has my wife.”
This situation has taken an emotional toll on Andersson.
“At first, I wondered if I was a failure as a father or husband because I can’t get my kids a lawn to play on,” he said. “It’s taken a lot of soul-searching to understand this is not my fault. It’s the fault of a poorly planned system.”
The CNN poll was conducted by SSRS from June 3-24, before President Joe Biden dropped out of the 2024 presidential race on July 21, among a random national sample of 2,021 adults initially reached by mail, and 407 adults reached by random digit dialing to a sample of prepaid cellphone numbers. Surveys were either conducted online or by telephone with a live interviewer. Results for the full sample have a margin of sampling error of plus or minus 2.7 percentage points; it is larger for subgroups.
