Own a Home? You Might Be Upper Class

A sizeable percentage of Americans, particularly the young, view homeownership as only accessible to the upper classes, a new poll conducted exclusively for Newsweek found.

Homeownership has long been an aspiration for millions of Americans—viewed as a marker of the American dream and a bedrock on which to build the foundations of a family. Homeownership, once considered a regular expectation for the middle classes, is now perceived as a loftier goal only attainable to those in the upper echelons of America’s class system.

Those in Generation Z, born between 1997 and 2012, were the most likely to believe that purchasing your own home is an upper-class aspiration, with 28 percent believing this, according to a Redfield and Wilton Strategies poll conducted between February 18 and 19. The poll surveyed 1,500 eligible U.S. voters.

By comparison, 21 percent of millennials, 10 percent of Generation X, and 8 percent of baby boomers believe the same.

The poll found that a majority of people still believe homeownership is within the reach of the middle classes, particularly the oldest generations, with 80 percent of those born before 1964 indicating so. For younger Americans, 57 percent of Gen Z and 62 percent of millennials thought owning a home was middle-class.

The poll found that most people believe it is harder for a young person to buy their own home than it was for previous generations, with 69 percent across all age groups agreeing. Only 16 percent believe it is now easier to purchase a home than in previous decades.

Attitudes are clearly changing. According to research conducted by Gallup in 2023, 78 percent of people said they believed last year was a bad time to buy property.

Before 2022, more than 50 percent of Americans believed at the time that it was a good time to purchase a home. Gallup reported that in 1978, 53 percent of people thought it was a good time to buy a house. In the 1980s this rose to 67 percent, with a record high recorded in 2003, when 81 percent of people thought buying would be a good decision.

Optimism over homeownership is waning. “It is likely that Americans’ pessimism about homebuying reflects the high prices and high interest rates that are conspiring to make mortgage payments less affordable. These attitudes may keep many prospective homebuyers out of the market,” Jeffrey M. Jones, senior editor at Gallup, wrote in May 2023.

“Homeownership has largely become viewed as an upper-class achievement due to home price and home value appreciation, especially in the past five years,” Maureen McDermut, Realtor at Sotheby’s International in Santa Barbara, California, told Newsweek.

“This, plus the market pressure investors have created, has made it appear to be a more difficult aspiration for middle-income families and individuals.”

McDermut said that a lack of housing suitable for younger generations is also preventing them from buying their home of choice.

“From a cultural standpoint, it has largely been the millennial and Gen Z groups that have truly felt this way,” she said. “Because many boomers and Gen Xers are staying in their homes longer, the lack of inventory can make buying a home seem even more out of reach for younger generations.”

While Gen Z Americans find the prospect of homeownership more out of reach than all other groups, many millennials are managing to get on the property ladder despite the harsh economic conditions over the last 15 years, from the 2008 financial crash to the high interest rates and soaring inflation of more recent years.

More than half of all millenials in the U.S. currently own homes, with the median homeownership rate of those born between 1981 and 1996 recorded as being 51.5 percent in 2023, according to Rent Cafe.

A boost to homeownership among the young is likely a result of the coronavirus pandemic, with low interest rates, student loan pauses, stimulus checks and lockdowns all thought to contribute to some prospective buyers being able to save more. According to an analysis of U.S. census data by Rent Cafe, millennial homeowners have increased by seven million over the five years preceding 2023.

“The impact of Covid on emerging homeowners, particularly Millennials and Gen Z, has been profound,” Marcene Hedayati, principal broker at Corcoran Legends Realty, told Newsweek. “With the rise of virtual work arrangements, millennials, who previously struggled with high housing costs in major cities, during COVID, had the flexibility to relocate to more affordable areas and transition from renting to owning. This shift had been further fueled by historically low interest rates spanning from 2000 to 2022, facilitating increased homeownership among millennials.

“However, Gen Z has faced challenges in the aftermath of COVID. The resulting low inventory, coupled with rising interest rates and a resurgence of in-person work requirements, has limited their options for homeownership. Consequently, Gen Z now predominates among renters, facing barriers to realizing the traditional American dream of owning a home.”

However, the picture isn’t as positive as it was for previous generations. By age 30, just 42 percent of millennials owned homes, compared to 48 percent of Gen Xers and 51 percent of baby boomers, according to an analysis of government data by Apartment List.

Are you young and have struggled to afford your own home? Have you given up on the prospect of home ownership? Email [email protected]