For an increasing number of Americans, owning a house is becoming a distant dream. According to a recent survey by the New York Federal Reserve, the share of renters who believe they would be able to move from renting a house to owning it fell to a record low of 13.4%, down from 15% in 2023.
Why?
Respondents state sky-high mortgage rates, rising house prices, lack of affordable housing, and increasing rental costs are the main reasons.
Around 74.2% of renters in the survey find it challenging to secure a mortgage. And even when they do, the average 30-year fixed-rate mortgage stands at 7.22%, the highest since late November 2023, per Freddie Mac.
Despite the possibility of interest rate cuts by the Fed before the end of this year, people believe mortgage rates will continue to rise. They also expect rental costs to climb by 9.7% over the next year.
Overall, Americans renting houses paint a grim outlook about home ownership in the next few years.