Bankrate’s 2024 Home Affordability Report
For many Americans, buying a home will be the single biggest purchase of their lives. The homebuying process can be a drawn-out and stressful ordeal, but it’s even harder in today’s expensive housing market.
Bankrate conducted several surveys in the last year with polling agency YouGov Plc to keep up with the country’s changing opinions on homebuying. In each poll, Bankrate surveyed over 2,000 Americans age 18 and older on topics like home affordability and what homeowners regret about their home purchases. The resulting data, weighted to represent all U.S. adults, shines a light on Americans’ struggles with the high costs of homeownership.
Homebuyers today are being priced out of a market with low inventory, high prices and high mortgage rates. To make matters worse, their financial concerns aren’t necessarily over when they get their keys. Nearly half (47 percent) of current U.S. homeowners have a regret about their purchase, according to new data from Bankrate’s April 2024 Homeowner Regrets Survey.
Specifically, many American homeowners with regrets say maintenance and other hidden costs are more expensive than expected (40 percent), they bought too small of a house (18 percent) or their house is in a bad location (15 percent), among other issues.
The struggle to afford a home is more than anticipating a costly mortgage rate — aspiring homeowners also need to consider potential maintenance and repairs, taxes and other costs. Whether you’re currently a homeowner or you don’t plan to buy for a while, it’s important to begin saving for those additional expenses today.
Current and prospective homeowners will be wise to prioritize saving for the inevitable and significant sudden expenses that can arise without warning.— Mark Hamrick, Bankrate Senior Economic Analyst
Bankrate’s key insights on homebuying
- Homeownership regrets are common. 47% of current U.S. homeowners have a regret related to their home purchase, according to our new April 2024 Homeowner Regrets Survey.
- Unforeseen costs add up. 40% of homeowners who regret something about their home purchase cite maintenance or other hidden costs, according to our Homeowner Regrets Survey.
- Owning a home feels important. 78% of U.S. adults say owning a home is part of the American Dream, according to Bankrate’s March 2024 Home Affordability Survey.
- But finances get in the way. 56% of non-homeowners say lack of sufficient income is keeping them from owning a home, according to our Home Affordability Survey.
Homebuying regrets are common, particularly high maintenance costs
Looking back on their home purchase, homeowners with regrets most commonly cite maintenance and other hidden costs being more expensive than they anticipated (40 percent), according to our Homeowner Regrets Survey. Other regrets include buying too small of a house (18 percent), buying a house in a bad location (15 percent), overpaying/paying too much (14 percent), their mortgage payment being too high (13 percent), buying too big of a house (10 percent) or not getting the best mortgage rate (10 percent):
Notes: Respondents could select more than one response; Percentages are among those who have a regret about purchasing their current home.
Source: Bankrate survey, April 15-17, 2024
In light of the high percentage of people impacted by unforeseen maintenance costs for their home, Bankrate Senior Economic Analyst Mark Hamrick advises current and prospective homeowners to save now to avoid taking on debt for home repairs in the future.
“In the current ‘higher for longer’ interest rate environment, the return on savings can deliver multiple benefits,” Hamrick says. “First is the yield paid on savings. Second is avoidance of the high cost of debt to pay for repairs or maintenance.”
Bankrate’s take: Hamrick is referring to the Federal Reserve’s federal funds rate, which has been stubbornly high for over a year. That doesn’t affect fixed-rate mortgages, but it could affect short-term loans, like credit cards used for home repair.
If given the chance, over 2 in 3 homeowners would buy their house again
Despite regrets, most American homeowners (69 percent) would buy their current home if they had to do it over again, according to our Homeowner Regrets Survey. Another 19 percent of American homeowners said they wouldn’t buy their current home again and 13 percent said they didn’t know:
Note: Percentages are among U.S. homeowners.
Source: Bankrate survey, April 15-17, 2024
Younger Americans, like Gen Zers (ages 18-27), tend to be happier with their homebuying decisions. Over three–quarters (77 percent) of Gen Z homeowners and 76 percent of millennial homeowners (ages 28-43) say, if they had to do it over again, they would still buy their current home, compared to 65 percent of Gen X homeowners (ages 44-59) and 66 percent of baby boomer homeowners (ages 60-78).
As of March 2024, high housing costs keep people from achieving their American Dream
Owning a home, and the physical and financial security that comes with it, has historically been considered a part of the American Dream. That still seems to be the case, as 78 percent of U.S. adults say they consider owning a home to be part of the American Dream, according to our Home Affordability Survey. It’s the most popular option suggested by Bankrate — more than being able to retire (65 percent) or having a successful career (65 percent), among other options:
Note: Respondents could select more than one response.
Source: Bankrate survey, March 6-8, 2024
Among generations, Gen Xers and baby boomers are most likely to believe owning a home is part of the American Dream (83 percent and 88 percent, respectively). Gen Zers, who are less likely to own a home today compared to their older peers, are least likely to say owning a home is part of the American Dream (68 percent). Instead, Gen Zers most commonly cite having a successful career (70 percent).
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No matter where Americans live, the majority believe owning a home is a part of the American dream. However, more people believe that in relatively affordable areas. More people in the Midwest and South say owning a home is part of the American Dream (82 percent and 80 percent, respectively) compared to those in the West and Northeast (76 percent and 73 percent, respectively):
We asked: Which, if any, of the following do you consider to be part of the “American Dream?”
Northeast Midwest South West Note: Respondents could select more than one response.
Source: Bankrate survey, March 6-8, 2024Owning a home 73% 82% 80% 76% Owning a car, truck or other automobile 49% 57% 55% 51% Having children 44% 49% 44% 43% Getting a college degree 38% 32% 35% 37% Being able to retire 61% 73% 66% 61% Having a successful career 65% 63% 65% 66% None of these 8% 6% 6% 5% Similarly, Americans living in rural areas are the most likely to say owning a home is part of the American Dream (87 percent) compared to those in cities (71 percent) or suburbs (81 percent):
We asked: Which, if any, of the following do you consider to be part of the “American Dream?”
City Suburb Town Rural area Note: Respondents could select more than one response.
Source: Bankrate survey, March 6-8, 2024Owning a home 71% 81% 80% 87% Owning a car, truck or other automobile 48% 52% 56% 65% Having children 42% 43% 49% 51% Getting a college degree 38% 35% 37% 30% Being able to retire 56% 70% 70% 72% Having a successful career 63% 65% 69% 63% None of these 8% 5% 5% 5%
Over 3 in 4 Americans who don’t own homes cite unaffordability
Most U.S. adults (78 percent) who don’t own a home but desire to cite affordability-related reasons as holding them back, according to our Home Affordability Survey. Specifically, they cite not having enough income (56 percent), home prices being too high (47 percent) or not being able to afford a down payment and closing costs (42 percent).
Millennials who don’t own a home but desire to are the most likely generation to say too much debt is keeping them from purchasing one (25 percent), compared to 17 percent of Gen Xers, 16 percent of baby boomers and 13 percent of Gen Zers. Gen Zers who don’t own a home but desire to were the most likely generation to say they just aren’t ready yet (43 percent):
Notes: Percentages are of U.S. adults who don’t own a home but have a desire to; Respondents could select more than one response
Source: Bankrate survey, March 6-8, 2024
“Owning a home is still the centerpiece of the American Dream, but affordability is the main obstacle to making that a reality,” Bankrate Chief Financial Analyst Greg McBride says. “Aspiring homeowners point to the combination of insufficient income, high home prices and not having saved enough for the down payment and closing costs as the dominant pain points.”
Money tip: The average median-priced home in the U.S. costs $402,343, which would require an annual income of $110,871 to purchase, according to Bankrate’s Housing and Income Study.
Among Americans who don’t own their own home but want to, women are significantly more likely than men to say they can’t afford the down payment and closing costs (47 percent compared to 36 percent):
We asked: Which, if any, of the following are reasons you don’t currently own a home?
| Men | Women | |
|---|---|---|
|
Notes: Percentages are of U.S. adults who don’t own a home but have a desire to; Respondents could select more than one response. Source: Bankrate survey, March 6-8, 2024 |
||
| I don’t have enough income | 56% | 55% |
| I can’t afford a down payment and closing costs | 36% | 47% |
| Home prices are too high | 46% | 48% |
| Just not ready yet | 27% | 24% |
| My credit isn’t good enough | 26% | 26% |
| Mortgage rates are too high | 25% | 31% |
| Too much debt | 18% | 18% |
| Lack of available homes/inventory | 12% | 11% |
| Other | 7% | 6% |
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Despite the high cost of housing in the region, Northeasterners who don’t own a home but want to are the least likely to say they can’t afford a down payment and closing costs on a home (32 percent) compared to 43 percent of Midwesterners, 45 percent of Southerners and 43 percent of Westerners:
We asked: Which, if any, of the following are reasons you don’t currently own a home?
Northeast Midwest South West Notes: Percentages are of U.S. adults who don’t own a home but have a desire to; Respondents could select more than one response.
Source: Bankrate survey, March 6-8, 2024I don’t have enough income 53% 59% 56% 54% Home prices are too high 48% 46% 45% 50% I can’t afford a down payment and closing costs 32% 43% 45% 43% Mortgage rates are too high 29% 25% 27% 31% Just not ready yet 28% 28% 26% 20% My credit isn’t good enough 23% 23% 31% 25% Too much debt 19% 23% 17% 15% Lack of available homes/inventory 10% 12% 11% 14% Other 6% 7% 7% 6% Rural Americans who don’t own a home but want to are the most likely to cite affordability-related reasons (85 percent), compared to non-homeowners in suburbs (79 percent), towns (77 percent) and cities (76 percent).
They are also far more likely to say they don’t have enough income to buy a house (68 percent), compared to people living in areas that typically have access to higher-paying jobs, such as suburbanites (57 percent), city dwellers (53 percent) or people living in towns (51 percent):
We asked: Which, if any, of the following are reasons you don’t currently own a home?
City Suburb Town Rural area Notes: Percentages are of U.S. adults who don’t own a home but have a desire to; Respondents could select more than one response.
Source: Bankrate survey, March 6-8, 2024I don’t have enough income 53% 57% 51% 68% Home prices are too high 45% 51% 49% 44% I can’t afford a down payment and closing costs 36% 46% 42% 49% Mortgage rates are too high 30% 27% 25% 24% My credit isn’t good enough 26% 27% 27% 27% Just not ready yet 24% 28% 26% 20% Too much debt 18% 20% 16% 15% Lack of available homes/inventory 11% 14% 10% 11% Other 5% 8% 8% 9%
More than 2 in 3 Americans would make a change for more affordable housing
The majority (69 percent) of Americans would be willing to do something to find more affordable housing. Many of those people would be willing to downsize their living space (44 percent) or buy a fixer-upper (34 percent), according to our Home Affordability Survey. Many would even be willing to move out of state (34 percent).
Across most generations, the top sacrifice for more affordable housing would be downsizing (62 percent of baby boomers, 49 percent of Gen Xers and 33 percent of millennials). The exception is Gen Zers, who most commonly say they’d be willing to take on roommates or living with additional family members (38 percent):
Note: Percentages are of U.S. adults who would be willing to do something to find more affordable housing; Respondents could select more than one response.
Source: Bankrate survey, March 6-8, 2024
Among those willing to take steps to find more affordable housing, women (49 percent) are more likely than men (39 percent) to say they’d be willing to downsize their living space, but men are more likely to consider moving to a less desirable area (24 percent versus 15 percent of women) or move farther from work (20 percent versus 15 percent of women).
Geographically, those in the Northeast (40 percent) would be most willing to move out of state (40 percent), and those in the Midwest would be the least likely to do so (27 percent). Those in the West would be the most willing to move to a less desirable area (27 percent), while those in the Northeast would be the least likely (14 percent).
Only 31 percent of Americans are unwilling to do anything to find affordable housing, particularly among older generations:
- Gen Zers: 19 percent
- Millennials: 24 percent
- Gen Xers: 33 percent
- Baby boomers: 40 percent
Bottom line
If you’re looking for affordable housing in 2024, it might be more cost-effective to rent, depending on where you live. Renting is more affordable than buying a home in the top 50 U.S. metros, according to Bankrate’s Rent vs. Buy Affordability Study.
If you’re a first-time homebuyer still determined to buy this year, there are a few options available to you, even if you don’t have a hefty down payment saved. Check your state’s housing finance agency to see if you’re eligible for loans or grants for your down payment and closing costs. Several big banks and nonprofits also offer down payment help. Alternatively, consider low down payment loans available from conventional lenders or the Federal Housing Administration.
Purchasing your first home can be intimidating, but there are options to help you achieve this big step in your financial journey.
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The survey on homeowner regrets was conducted by YouGov Plc. All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2,408 adults, of which 1,270 were homeowners. Fieldwork was undertaken between 15th-17th April 2024. The survey was carried out online. It employed a non-probability-based sample using both quotas upfront during collection and then a weighting scheme on the back end designed and proven to provide nationally representative results.
The survey on homeownership and the American Dream was conducted by YouGov Plc. All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2,317 adults. Fieldwork was undertaken between 6th-8th March 2024. The survey was carried out online. It employed a non-probability-based sample using both quotas upfront during collection and then a weighting scheme on the back end designed and proven to provide nationally representative results.
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