Many renters across the United States are increasingly fearful that they may never be able to purchase a home. A recent survey conducted by Qualtrics for Redfin shows American renters are increasingly doubtful they will ever be financially able to purchase a home — 38% or respondents expressed pessimism, up from 27% just last year.
Redfin’s Chief Economist, Daryl Fairweather, highlighted that “housing costs are high across the board, but renting remains a more affordable and realistic option for many Americans right now.” This situation has been made much worse by the consistently rising consumer price inflation under “Bidenomics.” According to Freddie Mac, the average 30-year mortgage rate has soared to about 6.9%, nearly doubling over the past two years.
Report: Renters Worry They Won’t Be Able to Afford Homes in Biden’s America https://t.co/A4DWa3P9de
— JB (@JBRawhide) April 14, 2024
The housing market, once seen as a stable pillar of the American economy, now appears to be facing unprecedented risks. National Association of Realtors economist Lawrence Yun said March’s consumer price index report was “very bad news for interest rates.”
Under the Biden administration, Generation Z is facing an uphill battle in securing financial stability. Harvard University’s Joint Center for Housing Studies recently found that many renters are now paying more than half of their income on rent and utilities in the aftermath of the COVID-19 pandemic. Meanwhile, nearly eight million migrants have poured into the country since Biden assumed office, placing ever greater pressure on the dwindling supply of rental properties.
Critics argue that the Federal Reserve’s policies under Chairman Jerome Powell have compounded these issues. Despite a historic low in interest rates during the pandemic, which temporarily boosted the housing market, the subsequent rate hikes have dampened the housing industry, making it a victim of its previous successes. While acknowledging the challenges, Powell has made it clear that the Fed does not see these issues as within its direct remit, focusing instead on its broader goals of maximum employment and stable prices.
The current trajectory of the U.S. housing market and broader economic policies under the Biden administration are proving unsustainable for many Americans. While the administration has proposed measures such as $10,000 tax credits for first-time homebuyers, these are likely insufficient to counterbalance the effects of high inflation and Federal Reserve rate policies.
The future of homeownership looks increasingly uncertain, especially for younger Americans. With rising costs, higher rates, and significant barriers to saving enough for down payments, the path to independence is fraught with challenges.
