An affordability crisis is making some young Americans give up on ever owning a

Washington, DC
CNN
 — 

Americans are living through the toughest housing market in a generation and, for some young people, the quintessential dream of owning a home is slipping away.

Mortgage rates surged in recent years, hitting the highest levels in more than two decades last fall. While rates have come down slightly since then, home prices remain painfully elevated and a limited inventory of housing is still failing to keep up with demand. Such conditions mean that housing has become woefully unaffordable.

Falling mortgage rates in recent weeks have helped, but home prices could remain sticky, according to economists. It’s still a cruddy time to be hunting for a home, but it’s even worse for young, first-time buyers who need to save up for a down payment and build up their credit score during a time when Baby Boomers are refusing to part with their big houses.

The situation isn’t a whole lot better for renters, with rents barely coming down from record highs and half of tenants in that market saying they can’t even afford their payments.

The uneasiness over America’s affordability crisis is captured clearly in surveys and polls, but data that outlines the sentiment specifically among young people is limited.

CNN spoke with some young Americans about their thoughts on the current state of the US housing market and their plans for the future.

Brandie Grant, 35, lives in the San Francisco Bay Area, one of the most expensive housing markets in the country. Despite a difficult upbringing, she pushed herself to graduate from college with a bachelor’s degree and is now making $76,000 a year as a senior consultant for an academic publishing company, but she said she is barely making ends meet.

After paying all her bills each month, including $500 to chip away at more than $90,000 in student debt, Grant said she doesn’t have enough to save for a down payment.

“I’m real, real tired,” she said. “Having kids will never be on the table. I haven’t even put a cent in my retirement fund, so there is just zero hope for me to ever own a home.”

The minimum down payment required to purchase a home depends on various factors, such as the type of mortgage being taken out, the prospective homebuyer’s credit score, and the property’s asking price. The conventional wisdom is that hopeful buyers should save to put down 20% before shopping around, but doing that is a pipe dream for those who can’t even save to begin with.

But the typical downpayment for a first-time home buyer is usually much less: 6% last year, according to the National Association of Realtors. A government-backed Federal Housing Administration loan requires a downpayment of as little as 3.5%. But even saving up that much can be daunting.

And it’s taking nine years for the typical homebuyer to save up for the median down payment on a home with the median value in the United States, according to Zillow data.

Building up a down payment has also been difficult for Ross Bunton, a 26-year-old case manager living in St. Louis, Missouri, with his wife. That’s mostly due to a combination of how expensive his rent is and their costly medical bills, which eat up a significant portion of the couple’s monthly budget, he said.

Their current financial situation means having kids anytime soon is out of the question, he told CNN.

“I genuinely haven’t been able to save money over the past year,” Bunton said. “I don’t think that buying a house is super realistic for me even within the next couple of years, so I’m not really thinking about that right now, and if me and my wife were to have children, we would definitely want to be financially comfortable or capable of doing that. So, I also don’t see that as being realistic.”

For some, living with parents is the best option, and that certainly seems to be the case nowadays with housing affordability out of reach for many young people.
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