Could You Afford Your Home if You Had To Buy It Today? See Where Your Generation Ranks
It’s much harder for today’s adults to buy homes than it was for older generations decades ago. In fact, a new report from Redfin revealed that many U.S. homeowners couldn’t afford to buy their home if they were to purchase it today.
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According to the report, home prices have doubled over the last decade, and housing costs are at an all-time high due to rising mortgage rates. Respondents were asked: If you were looking to purchase a home, do you think you could afford a home like yours in your neighborhood today?
Nearly two in five (38%) homeowners said they don’t believe they could afford to buy their own home if they were purchasing it today.
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Boomers Most Likely To Be Unable To Afford Their Current Home Under Today’s Conditions
Redfin also broke it down by generation and found that baby boomers (45%) were the least likely to be able to afford their current home, compared to 39% of Gen Xers and 24% of millennials and Gen Zers. This appears reasonable, as Redfin noted that baby boomers are more likely to have purchased their home a long time ago for a much lower price. Empty-nest baby boomers also own twice as many large homes nationwide as millennials with children.
Between 1970 and 1975, the average cost of a home increased from $27,000 to $40,900, which would be $213,457.27 and $233,195.38 in 2024, respectively, according to the historical Census and Federal Reserve Economic Data (FRED) and as reported by Fox Business.
Today, homes are much more expensive. A new study by Clever also found that home prices are 24 times more expensive now than they were 60 years ago. If home prices increased at the same rate as inflation since 1963, the median price of a typical house in the U.S. would only be $177,500, compared to $431,000 today. Just over the last 10 years, inflation has increased by 31%, while home prices have increased by 63%.
“Today, it’s harder for adults to buy homes than it was for their parents’ generation,” said Matt Brannon, data writer at Clever and the author of the report, CNBC detailed. According to Brannon, mortgage rates have pushed up costs, but supply and demand have also impacted the price growth of homes in the U.S.
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This article originally appeared on GOBankingRates.com: Could You Afford Your Home if You Had To Buy It Today? See Where Your Generation Ranks
