Majority of Renters Fear Homeownership Is Out of Reach Forever—but Is That True?

Renters who desperately want to buy a home believe that dream is further out of reach than ever before—with many struggling to save for a down payment and high mortgage rates deterring them.

At least 86% of people currently renting want to buy a home, according to a new poll of more than 2,400 Americans conducted by CNN and research firm SSRS. But of those surveyed, at least 54% believe they’re unlikely to ever own a home.

It’s not that people don’t want the keys to their very own castle. In fact, 68% of respondents said they grew up in a home their parents owned, and 65% said they believe owning a home is intrinsically linked to fulfilling the American dream.

There’s just one major hurdle: The renters said they can’t afford a home.

The pricey path to homeownership

When asked about the financial obstacles preventing them from buying a home, around 40% said they could not save enough for a down payment, while 31% said mortgage interest rates were putting homeownership out of reach and 17% said they struggled to qualify for a mortgage.

These figures are a stark reminder of the unique financial strain many would-be buyers feel in a tough housing market where the odds seem stacked against buyers.

Take the median home price in the U.S., for example, which is around $445,000, and interest rates that are hovering around 7%.

With those numbers in the background, only 32% of homeowners believe they could afford to purchase a home in their current neighborhood, according to the survey.

A Realtor.com® analysis also backs up these renters’ financial feelings. It found that it’s more affordable to rent in the 50 largest metro areas than to buy property, though rent has also increased since the COVID-19 pandemic in many cities.

As of June 2024, the median monthly rent for a one-bedroom apartment in the U.S. was $1,618, while the median mortgage was $1,775.

Renters may be able to buy soon

People are spending a greater percentage of their income on rent, too. The rent-to-income national average reached 30% for the first time in 20 years in 2023, and in New York City and Miami, people are spending upward of 68% and 41% of their incomes on housing, respectively.

Yet still, “in all of the major housing markets, renting is more affordable than buying a starter home,” Realtor.com economist Jiayi Xu says. “It’s important for first-time buyers who are thinking, ‘Should I buy now or later?’ This will give them a clearer picture about their financial costs.”

But there is some positive news among renters, too, with around 53% of renters under 45 saying they believe that they will one day own a home. Only 32% of older renters feel the same way.

Yet there are signs that the market might cool soon, allowing some renters to make the move to homeownership.

June’s Realtor.com housing market trends report found that the number of homes on the market increased 36.7% year over year. More homes on the market boost supply and lower demand, which in turn cools median home prices.

Mortgage rates, a major hurdle for many would-be buyers, may head douth in the next few months. After hitting a high of 7.22% in May, interest rates are slowly inching back down below 7%. Many economists also believe the Federal Reserve will execute the first in a series of interest rate cuts in the next few months.