Have American Renters Given Up On The Dream Of Homeownership?

Eric McConnell

16 May 2024 at 12:30 pm·4-min read

Have American Renters Given Up On The Dream Of Homeownership?

A recent New York Federal Reserve study shows that a record-low number of renters believe they will ever achieve the traditional American dream of homeownership. The survey focused on renters' hopes of "residential mobility" and asked them how feasible it was for them to ever own a home. This year, the number of renters who believed they would ever own a home fell to a record low of only 13.4% of survey respondents.

In addition to being a record low, it's part of a trend where the percentage of renters surveyed who think they will own a home one day has been steadily declining. In 2023, 15% of respondents believed they would be able to purchase a home. However, as recently as 2014, a full 20% of respondents expressed confidence in their ability to become homeowners.

That was an all-time high. If the current downward trend continues, it's not impossible to imagine less than 10% of renters will report optimism about their homeownership prospects in 2025. The reasons for renters' newfound pessimism are not hard to figure out. High home prices and interest rates have conspired to deliver a sledgehammer-sized blow to many Americans' aspirations of ever purchasing a property.

Don't Miss:

Warren Buffett once said, "If you don't find a way to make money while you sleep, you will work until you die." Here's how you can collect passive rental income without being a landlord.
Elon Musk and Jeff Bezos are bullish on one city that could dethrone New York and become the new financial capital of the US. Investing in its booming real estate market has never been more accessible.

Nearly 75% of survey participants said they thought getting approved for a mortgage was "difficult or substantially difficult," and this data point is also trending in the wrong direction. The current high is up significantly from the 66% of renters who expressed the same concerns in 2023 and the 63% rate in 2022. That translates to an almost 20% uptick in survey respondents who see getting a mortgage as a significant obstacle to homeownership.

The survey respondents were also decidedly pessimistic about the prospects that home prices will come down in the future. The consensus among the respondents is that home prices will increase another 5% this year. Their predicted increase in 2022 was only 2.6%. They also expressed very little confidence that the Federal Reserve will be cutting interest rates in 2024.

Consequently, survey participants only see homeownership becoming more expensive in the years to come. Most of them estimated that their rent would go up by 9.7% in the next 12 months, representing a 1.5% jump over their estimates for the previous year. Taken as a whole, these survey results paint a shockingly grim picture of American renters' expectations for their future.

This kind of nationwide pessimism can’t continue indefinitely without having a corresponding negative effect on the economy as a whole. Homeownership has been one of the cornerstones of the American dream for the past several generations. Even Americans who didn't get rich were able to pass on generational wealth to their children, mainly as a result of their access to homeownership.

Previous generations of Americans viewed their apartments as temporary housing. Now it appears as if they have all but thrown their hands in the air and given up on ever being anything but tenants. It is a sad situation that can only be remedied by the kind of partnership between private enterprise and the government that gave birth to the FHA.

Read Next:

Passive income investments are one of the most trusted methods for riding out a recession, so it's no surprise that people are turning to this Jeff Bezos-backed startup to generate monthly rental income without having to purchase their own property.
Want to Create a Passive Income Stream? These High-Yield Real Estate Notes Might Be Your Holy Grail

"ACTIVE INVESTORS' SECRET WEAPON" Supercharge Your Stock Market Game with the #1 "news & everything else" trading tool: Benzinga Pro - Click here to start Your 14-Day Trial Now!

Get the latest stock analysis from Benzinga?

This article Have American Renters Given Up On The Dream Of Homeownership? originally appeared on Benzinga.com

CNN Business
Chinese government bonds are on fire. That’s ringing alarm bells in Beijing
Money is rushing into Chinese government bonds, sending their prices soaring as investors hunt for a safer alternative to real estate and stocks. Beijing is worried about a bust that could bring down some banks.
Reuters
Japan household spending unexpectedly falls, clouds BOJ rate path
Japanese household spending unexpectedly fell in May as higher prices continued to squeeze consumers' purchasing power, data showed on Friday, complicating the central bank's decision on how soon to raise interest rates. Many analysts expect consumption to rebound in coming months as big wage hikes offered by companies and a tax break aimed at cushioning the blow from rising living costs reach households. But the soft reading underscores the fragile nature of consumption, and casts doubt on the Bank of Japan's (BOJ) view a solid economic recovery will keep inflation durably around its 2% target - a prerequisite for raising interest rates.
The Telegraph
How Italy shook off its ‘basket case’ brand – and stole Britain’s millionaires
When Giorgia Meloni took to the stage to deliver a landmark tax speech to Italian legislators earlier this year, she launched an impassioned defence of how the ultra-rich should be treated.
Reuters
EU governments hesitant on Chinese EV tariffs as trade spat escalates
BRUSSELS/LONDON (Reuters) -EU countries are wavering over whether to back additional tariffs on Chinese-built electric vehicles, highlighting Brussels' challenge in building support for its largest trade case yet as Beijing threatens wide-ranging retaliation. Germany, whose carmakers made a third of their sales last year in China, wants to stop the tariffs, according to a government source, while France has been among the firmest backers. The issue will be put to members in an advisory vote in the coming weeks, the first official test of support in a landmark case for the Commission.
Bloomberg
Indonesia says 2025 budget deficit may be smaller than expected
Indonesian lawmakers agreed to a wider target range for the budget deficit for next year, with a likelihood that the shortfall could be smaller than previously estimated.
CNN Business
What to look for in Friday’s jobs report
The US labor market has held its own despite swirling forces — high inflation, an aggressive interest-rate-hiking campaign, pandemic aftershocks and geopolitical uncertainty — that seemed all but certain to trigger a recession.
Barrons.com
Fed Meeting Minutes Show Officials Still On the Sidelines With Rate Cuts
Policymakers noted a wide range of plausible outcomes for the economy and inflation, with differing interest-rate implications for each.
Yahoo Finance
June jobs report: US labor market set to show 'cooling but not cool' trend continues
The June jobs report comes at a crucial moment as economists debate whether the US labor market is still normalizing to pre-pandemic levels or showing the early signs of a broader slowdown.
The Hill
Fed confident in ‘restrictive’ rate level while sounding notes of caution
Minutes from the Federal Reserve’s June meeting revealed confidence among central bankers that elevated interest rates were having the desired effect of cooling the economy toward a soft landing and 2-percent annual inflation. “The vast majority of participants assessed that growth in economic activity appeared to be gradually cooling, and most participants remarked that they…
Reuters
India plans to hike rural housing subsidies to over $6.5 billion after election setback, sources say
India plans to increase state subsidies on rural housing in the upcoming federal budget by as much as 50% from the previous year to more than $6.5 billion, after setbacks for the prime minister's party in elections, two government sources said. The planned hike in housing subsidies is part of a broader government initiative to boost spending on rural infrastructure including village roads and a jobs programme to help millions of young people stuck in the agriculture sector amid limited manufacturing jobs. If approved, it would mark the largest annual increase in federal spending on the rural housing programme since its inception in 2016.
Reuters
US service sector sags in June as orders sink
The Institute for Supply Management said its nonmanufacturing purchasing managers (PMI) index dropped to 48.8 last month, the lowest level since May 2020, from 53.8 in May. It was the second time this year that the PMI had dropped below 50, which indicates contraction in the services sector. Economists polled by Reuters had forecast the services PMI slipping to 52.5. The PMI fell below the 49 level that the ISM says over time generally indicates an expansion of the overall economy.
Reuters Videos
Japan sees biggest pay hikes in 33 years - survey
STORY: Japanese companies delivered the biggest wage hikes in three decades this year.That's according to the nation's largest union on Wednesday.It said monthly pay was up 5.1% on average this year, with both big and small firms following the trend.The outcome of what's called the 'shunto' - or spring labor negotiations - is seen as key for Japan to achieve a positive cycle of economic recovery.It would help improve household income and consumption to outweigh the rising cost of living.Any positive and self-sustaining growth could also help policymakers put an end to deflation.It might also bring the Bank of Japan closer to further interest rate hikes.In mid-March, major firms said pay raises had accelerated to 5.28%, which was the biggest since the 1990s. The central bank then made its landmark decision to end negative interest rates.But income inequalities remain, with small firms finding it hard to offer big wage increases.To address such issues, Prime Minister Fumio Kishida's administration has vowed to raise minimum hourly pay to 1,500 yen - or $9.27 - from around 1,000 yen by the mid-2030s.
Associated Press
Federal Reserve minutes: Inflation is cooling, but more evidence is needed for rate cuts
Federal Reserve officials at their most recent meeting welcomed signs that inflation is slowing and highlighted data suggesting that the job market and the broader economy could be cooling. Both trends, if they continued, will likely lead the Fed to cut its benchmark interest rate in the coming months from its 23-year peak of 5.3%. The minutes of the Fed’s June 11-12 meeting, released Wednesday, showed that the policymakers saw several factors that could further ease inflation in the coming months.
The Telegraph
What to do now to shield your money from Labour
The exit poll is pointing to a huge Labour majority and Sir Keir Starmer is readying himself to pick up the keys to Number 10.
The Daily Beast
World’s Winningest Party Loses in Spectacular Style
LONDON—The Conservatives, the world’s winningest political party, were booted out of power in dramatic style on Thursday after 14 years of chaotic and divisive rule.The exit poll, which dropped at 10 PM local time (5 PM EDT), showed that the Labour Party had secured a landslide victory, ending an era of Conservative rule over Britain that stretches back to 2010; the year that the iPad and Instagram were launched and Lady Gaga wore that meat dress to the MTV music awards.In that time, the Conserv
NextShark
74-year-old woman dies after being shoved in front of San Francisco train
Corazon Dandan died after being pushed into an oncoming BART train at San Francisco’s Powell Street Station at around 11 p.m on Monday night. The suspect, 49-year-old Trevor Belmont, also known as Hoak Taing, was arrested at the scene and booked into the San Francisco County Jail on suspicion of homicide and elder abuse. Dandan, who was Filipino American, was a dedicated telephone operator at the Westin St. Francis and other hotels.
HuffPost
New Poll Finds 1 Democrat Absolutely Trouncing Trump
Just one problem: This person doesn't seem interested in running, should the opportunity arise.
Bloomberg
These flight routes suffer the world’s worst turbulence
A series of incidents that left scores of airline passengers needing medical attention has shone a spotlight on the problem of severe in-flight turbulence.
CNN
9 out of 10 voters say there are important differences between Biden and Trump. Here’s what they see as the biggest ones
If there’s one thing that American voters overwhelmingly agree on, it’s that this year’s presidential election presents a stark choice. In the latest CNN poll by SSRS, 91% of registered voters say they see important differences between President Joe Biden and former President Donald Trump, dwarfing even the 77% of voters who said last fall that there were significant divides between the Democratic and Republican parties. Even among the so-called “double haters” – those with unfavorable views of
BuzzFeed
"It Was The Worst Betrayal I Have Ever Experienced": People Are Revealing The Shocking Reason Why They Don't Speak To Their Sibling Anymore
"Once it became clear he was committed to those ugly morals, I told him never to contact me."

Straits Times Index

Nikkei

Hang Seng

FTSE 100

Bitcoin USD

CMC Crypto 200

S&P 500

Dow

Nasdaq

Gold

Crude Oil

10-Yr Bond

FTSE Bursa Malaysia

Jakarta Composite Index

PSE Index

Have American Renters Given Up On The Dream Of Homeownership?

Latest stories

Chinese government bonds are on fire. That’s ringing alarm bells in Beijing

Japan household spending unexpectedly falls, clouds BOJ rate path

How Italy shook off its ‘basket case’ brand – and stole Britain’s millionaires

EU governments hesitant on Chinese EV tariffs as trade spat escalates

Indonesia says 2025 budget deficit may be smaller than expected

What to look for in Friday’s jobs report

Fed Meeting Minutes Show Officials Still On the Sidelines With Rate Cuts

June jobs report: US labor market set to show 'cooling but not cool' trend continues

Fed confident in ‘restrictive’ rate level while sounding notes of caution

India plans to hike rural housing subsidies to over $6.5 billion after election setback, sources say

US service sector sags in June as orders sink

Japan sees biggest pay hikes in 33 years - survey

Federal Reserve minutes: Inflation is cooling, but more evidence is needed for rate cuts

What to do now to shield your money from Labour

World’s Winningest Party Loses in Spectacular Style

74-year-old woman dies after being shoved in front of San Francisco train

New Poll Finds 1 Democrat Absolutely Trouncing Trump

These flight routes suffer the world’s worst turbulence

9 out of 10 voters say there are important differences between Biden and Trump. Here’s what they see as the biggest ones

"It Was The Worst Betrayal I Have Ever Experienced": People Are Revealing The Shocking Reason Why They Don't Speak To Their Sibling Anymore