Home prices remain near record highs. Mortgage rates have retreated but remain well above their pandemic lows. Add it up, and homebuyers are feeling discouraged.
With housing affordability squeezing buyers, one in six (16 percent) of aspiring homebuyers have given up on purchasing a home in the past five years because they could not find anything they liked or could afford, according to a new Bankrate survey. Nearly 3 in 10 (28 percent) aspiring homeowners said the price of a home in their area was the most important issue when deciding whether to purchase a home. That’s in spite of a broad desire for homeownership — the vast majority of U.S. adults still consider owning a home a linchpin of the American dream, according to Bankrate’s 2025 Home Affordability Survey.
U.S. home affordability is at its worst level in decades.– Stephen Kates, Bankrate financial analyst
“U.S. home affordability is at its worst level in decades,” says Stephen Kates, financial analyst at Bankrate. “The punishing combination of high home prices, low supply and high mortgage rates has caused one in six home shoppers over the past five years to give up completely.”
Benjamin Clark, broker-owner of Buyer Representation in Salt Lake City, Utah, and president of the National Association of Exclusive Buyer Agents, agrees. “Prices have gone up significantly since Covid,” he says. “Interest rates have gone up significantly since Covid. And buyers’ incomes have not necessarily gone up.” Still, he says, buyers shouldn’t give up — new buying opportunities are opening up as the housing market cools nationallly.
A discouraging market: Hopeful buyers pull the plug on their home search
When asked about what the important issues are for determining their interest in buying a home, aspiring homeowners are most likely to point to the cost of homes in the area (28 percent) followed by the amount in their savings (16 percent), job situation (16 percent), an interest in staying in the same area long term (14 percent) and personal relationships (4 percent). Among those who are interested in purchasing a home, the cost of homes in the area is the most important factor across generations, genders and income brackets.
Among aspiring homeowners, just 7 percent are actively shopping for a home — searching for-sale homes in their area or attending open houses. Gen Zers are the most likely to be shopping for a home, with 1 in 10 (9 percent) doing so, followed by millennials (ages 29-44) at 7 percent, Gen Xers (ages 45-60) at 7 percent and baby boomers (ages 61-79) at 5 percent.
“Despite the difficulty in finding homes to purchase, nearly half of home shoppers report that prioritizing a home purchase in their local area is the most important factor influencing their decision,” Kates says. “For buyers who are struggling but remain committed to finding a house, expanding your search is a necessity. The house you can buy might be a little farther, a little older or a little weirder than you initially wanted, but you can make it your own.”
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This article originally appeared here and was republished with permission.
