An alarming number of renters say they’re fearful that they’ll never be able to afford to buy a home in their lifetime, a new survey has found.
The study by Lending Tree, an online loan marketplace, found that 48% of renters say they believe rising home prices and stagnant wages mean they’ll never become homeowners.
Worse still, it’s mainly younger generations that share the sentiment. According to the survey, 55% of Generation X renters say they’re concerned about their prospects of ever becoming a homeowner. Fifty-two percent of millennial renters feel the same way, the survey responses show.
Lending Tree Senior Economic Analyst Jacob Channel said there were two key reasons why an increasing number of renters are worried. “What they’ve been seeing for a while now, especially during the pandemic, is home prices rising really, really fast and wages not necessarily keeping up,” he explained.
Most renters aren’t too happy about their status as non-homeowners either. The survey shows that 76% of Americans would prefer to own a home if the could.
One of the biggest problems holding renters back, besides the high prices and low wages, is saving for a down payment, as cited by 54% of renters. Another 32% said they will likely find it difficult to secure a mortgage due to their low credit scores.
It’s a big concern because most of the U.S. middle class relies on home equity as their primary source of wealth. That’s not true of wealthier families that tend to own more diverse financial assets such as stocks and bonds, according to the Pew Research Center.
Federal Reserve data shows that at the end of the first quarter of 2021, Americans held approximately $34 trillion worth of real estate assets, which amounted to 23% of the nation’s total household assets. Households also held $11 trillion in home mortgage liabilities.
Lending Tree said it polled 2,050 U.S. renters in August for the survey. However, it noted this is the first time it has polled renters on this question, so it cannot compare the current homeownership sentiment with previous years.