The Ability to Buy a Home Becomes Increasingly Difficult in the U.S.
Cushman & Wakefield Chairman of Global Brokerage Bruce Mosler recently discussed the impact of President Donald Trump on commercial real estate and the effects of 7 percent mortgage rates on Americans. The ability to buy a home has become increasingly difficult in the U.S. in recent years, with rising interest rates, inflated home prices, and stagnant wages forcing many into a cycle of lifelong renting.
Experts are concerned about the long-term impact on young adults, who are currently facing a higher hill to climb to achieve the American dream than previous generations. “Rising interest rates, inflated home prices, and stagnant wages are forcing many into a cycle of lifelong renting, where building equity feels increasingly out of reach,” said real estate investor Lori Greymont.
Financial expert Dr. David Phelps agrees that the cost of housing has become unaffordable for a significant portion of the population, especially for Gen Z. “Wages haven’t kept up with inflation or the rapidly rising home costs, and that’s before you even factor in rising interest rates and tightening underwriting guidelines.”
According to Phelps, based on the average salary in the U.S., a home buyer can afford a home that costs $110,928, which is a fraction of the median home price of $420,400 today. Tom Spaeth, owner of Easal Properties, notes that the supply of homes that young families on a median income can afford to buy has decreased significantly in the last 10 years.
Psychotherapist and author Jonathan Alpert says the housing affordability crisis not only has economic implications but also takes a serious psychological toll on young adults. “Many Gen Zers are experiencing anxiety, frustration, and feelings of failure as they struggle to achieve what previous generations saw as a rite of passage,” Alpert said.
Achieving the American dream has become increasingly difficult, and experts believe that a strategic shift is necessary to ensure that young adults can afford to buy homes. As economic conditions shift, opportunities will open up, and resilience, adaptability, and a change in narrative around this topic will be crucial for navigating these challenges.
