Homeownership has become increasingly difficult in recent years due to high home prices, elevated mortgage rates, and limited housing supply. But according to Business Insider, conditions may improve slightly by 2025, with slower home price growth, potentially lower mortgage rates, and increased housing inventory expected to ease costs. However, these benefits are likely to favor more experienced homeowners, while younger buyers—particularly those in Generation Z and Millennials—will continue to face challenges.
Indeed, first-time homebuyers are having unprecedented difficulty in the housing market. It's typically more difficult for first-time buyers to purchase a home because they don't have funds from selling a previous home to use for a down payment and mortgage payments, Redfin said in a June report, but today's housing environment is especially hostile towards young buyers.
Wages simply haven't kept up with the pace of home price increases over the past five years. According to Elijah de la Campa, a Redfin senior economist, the cost of starter homes have increased twice as fast as incomes during that time. Additionally, for Gen Z and millennials, student loans and credit card debt are emerging as roadblocks to homeownership, as it's difficult to qualify for mortgages with a poor credit score and high levels of debt. Read more