Over Half of Americans Who Don’t Own a Home Fear They Never Will—but They’re Wrong

Is the American dream of owning a home an impossible one? Depends on whom you ask.

A new study by Northwestern Mutual found that 53% of Americans who are not currently homeowners feel that owning a home will never be financially affordable, now or in the future.

But many real estate agents and financial experts believe that's just not the case.

The housing market in 2025

Despite the survey's findings, there are signs the real estate market is improving.

The Freddie Mac rate for a 30-year mortgage dropped to 6.63% last week, the lowest it's been since December.

And the Realtor.com® 2025 Housing Forecast predicts even more buyer-friendly dynamics to come, such as the slowest seasonal market in five years and nearly 20% of listings having price cuts. 

However, there are some obstacles, including limited inventory in many areas and President Donald Trump’s tariffs affecting the future of new builds.

The National Association of Home Builders estimates that approximately 8% of the materials used in new-home construction are sourced from abroad. As a result, tariffs are expected to increase the overall cost of building a home by between $7,500 and $10,000.

"Rising costs due to tariffs on imports will leave builders with few options," says Realtor.com Chief Economist Danielle Hale. "They can choose to pass higher costs along to consumers, which will mean higher home prices, or try to use less of these materials, which will mean smaller homes."

Generational divide

Perhaps this is why people across various generations share the same sense of pessimism about homeownership.

According to the Northwestern Mutual study, nonhomeowner millennials (58%) were the most likely to view homeownership as an unaffordable goal, followed by boomers (52%) and Gen X (51%).

"Millennials, boomers, and Gen Zers that are feeling discouraged should focus on what’s possible instead of what’s ideal," advises real estate agent and investor Ron Myers, of Ron Buys Florida Homes. "That might mean a smaller home, a different location, or house hacking to offset costs. Waiting for a perfect market could mean waiting forever."

Nonhomeowner Gen Zers (49%) displayed the most optimism that they’ll be able to afford a home one day.

"The cliche thing to say is that younger generations can't afford homes because we've spent too much of our income on avocado toast," says Abigail Hall Blanco, associate professor of economics at the University of Tampa. "I do believe homeownership is feasible for younger generations—but it may look different than it did for our parents."

A hopeful outlook for the housing market

Many housing experts express optimism for the future of real estate.

"Homeownership is feasible for every American—the key is location," says Jennifer Beeston, vice president of mortgage lending at Guaranteed Rate \Mortgage. "There are parts of the country such as New York City or Los Angeles where homeownership is out of reach for the average American. However, there are many parts of the country where it is not. I think that with the increase of remote working in 2020, we really saw the beginning of a migration to more affordable housing, which I think we will continue to see."

Side gigs provide pathways to owning a home, as well, according to one real estate investor.

"If people are discouraged about homeownership, they should find a side hustle outside of their 9-to-5 that they can do to increase their income," advises Joel Efosa, CEO at Fire Cash Buyer in Westport, CT. "I'm a millennial who personally worked on Wall Street by day and did real estate investing after work hours. In two years, I had a handsome down payment for a new home."

The average one-year return on real estate since 1975 is +4.7%—and housing is still a good investment, according to Armstead Jones, strategic real estate adviser at Real Estate Bees.

"History has always showed us that buying now is better than waiting for the perfect time," he says. "Prices over history have and will always increase."

Market conditions are also expected to improve, which will help pave the way to homeownership for many.

"For-sale inventory has built up over the last couple of years, offering buyers more options than they have seen since pre-pandemic," says Realtor.com senior economic research analyst Hannah Jones. "More for-sale inventory has knocked some of the steam out of price growth, resulting in a more favorable buying environment. Future buyers will enjoy these market dynamics, especially once mortgage rates ease."

Source: Julie Taylor, realtor.com