Why Young Americans Feel They Can't Afford Homes

Many people in America who don't own a home feel really down about their chances to buy one. A big survey by Northwestern Mutual found that over half of these folks (53%) believe they'll never be able to afford a home. 

This is a big deal because the dream of owning a home seems more out of reach than ever, especially for younger generations like Gen Z and millennials.

Other reports back this up, showing that buying a home is becoming harder and harder. For example, the National Association of Realtors pointed out that homebuyers are getting older. 

In 2025, the average age of someone buying a home went up to 56 from 49 just a year before. And first-time buyers? Their average age rose from 35 to 38. This means younger people are struggling more to compete in the housing market, mainly because they don't have enough money saved.

The prices of homes have shot up a lot too. Realtor.com notes that in February, the middle price for homes listed was $412,000, a huge jump of 39.2% since 2019. If you look at the price for each square foot, it's even worse: a 54.8% increase.

Even though mortgage rates (the interest you pay on a home loan) have gone down a bit after hitting over 7%, they're still pretty high at 6.65%. With inflation (the rate at which general prices for goods and services rise) still over the target, and hints from financial officials that interest rates might not drop until summer, high mortgage rates could stick around.

People are also struggling because everything is getting more expensive, not just homes. Inflation is the number one money worry for most, making it even harder to save up.

The survey highlighted specific reasons why owning a home feels impossible for many:
 

• 64% don't have enough for a down payment (the initial lump sum you pay).
• 48% say mortgage rates are too high.
• 43% find the housing market too competitive.

Interestingly, Gen Z (the younger group) is a bit more hopeful about buying homes than older generations, but not by much. While 58% of millennials feel discouraged, 49% of Gen Z feels the same.

John Roberts from Northwestern Mutual pointed out that age plays a big role in how people view their chances of owning a home. Gen Z has the advantage of time to save money and maybe enter the housing market more easily later on.

So, while buying a home feels like an impossible dream for many young Americans right now, there's a bit more hope for the youngest adults as they look to the future.

Government programs like FHA loans allow for down payments as low as 3.5%, while many states offer their own grants and low-interest loans for first-time buyers. 

Check out: Down Payment Strategies for First Time Homebuyers

Despite these options, awareness remains low, underscoring the need for better outreach to help potential buyers access available assistance.

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