For many middle-income Americans, earning more than previous generations has not necessarily made homeownership more attainable. A recent survey of more than 1,000 renters earning between $40,000 and $125,000 found that 44% earn more than their parents did at the same age, yet still believe they cannot afford a home.
The affordability gap is largely tied to the rapid rise in home prices. Between 1990 and 2024, the median price of an existing home increased more than 320%, while incomes grew roughly 180%. The gap widened further following the pandemic, with home prices rising about 50% from 2019 to 2024 compared with approximately 22% income growth.
Affordability Isn't the Only Barrier
High prices and mortgage rates aren't the only factors keeping renters from buying. Many also point to limited savings, rising insurance and property taxes, HOA costs, income uncertainty, and concerns about committing to one location.
For younger renters in particular, homeownership can feel like a long-term commitment at a time when careers, family needs, and locations may still be changing.
There is also a knowledge gap around financing. Nearly 94% of surveyed renters did not know that some mortgage programs allow down payments as low as 3% to 3.5%, while more than half believed a 20% down payment was necessary.
What It Means for SFR and BTR
The growing gap between household income and home prices could keep more middle-income Americans in the rental market for longer. For single-family rental and build-to-rent operators, this represents a significant pool of households seeking the space and lifestyle associated with homeownership without taking on the financial and geographic commitment of purchasing.
As the rent-versus-buy decision becomes increasingly complex, rental housing can serve as a long-term solution rather than simply a temporary step toward ownership.
Source: Realtor
