$420,400 Median Home Price Makes Homeownership A Distant Dream For Gen Z
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For many young adults, the high cost of housing is a significant barrier to achieving the American dream of homeownership.
A recent survey found that nearly 80% of Gen Z respondents cited exorbitant home prices as the primary obstacle to entering the housing market. Given the dramatic increase in home values over the past decade, the finding comes as little surprise.
According to the Federal Reserve Bank of St. Louis, home prices have surged by 58.7% since 2014, the year the oldest Gen Zers reached adulthood.
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The pandemic exacerbated the trend, with median home sale prices skyrocketing by $52,667 between 2020 and 2021, outpacing the median worker’s annual earnings. In some regions, price increases exceeded 50% within two years.
While the rapid pace of price growth has cooled in recent months as pandemic-related pressures eased, the median home sales price of $420,400 in the third quarter remains a significant hurdle for many young buyers.
The trend has significant implications for the future of homeownership in the United States, raising concerns about economic mobility and the ability of younger generations to achieve traditional markers of adulthood.
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The surge in housing prices has been particularly pronounced in Sun Belt metropolitan areas. According to Redfin, Cape Coral, Florida, experienced the most significant price increase between May 2020 and May 2022. Austin and Dallas, Texas; Boise, Idaho; Phoenix and several Utah cities also witnessed dramatic price increases.
Housing affordability has reached critical levels in some of the rapidly growing Sun Belt hot spots, surpassing even major coastal cities like New York and Los Angeles. Miami, for instance, has emerged as the nation’s least affordable housing market. With a median asking price of $589,000 and a typical median income of just $43,401, a typical Miami family would need to dedicate nearly 80% of their income to cover housing expenses, according to Bloomberg.
Homeownership in the United States is disproportionately concentrated among affluent and advantaged people. Conversely, less advantaged and younger Americans are significantly more likely to rent.
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A sharp increase in rental costs exacerbates the trend. Since the early 1980s, rents have surged by 350%, a rate comparable to or even exceeding the increase in the cost of homeownership. The rapid escalation continued recently, with rents rising by more than 15% between May 2021 and May 2022, exceeding an average of $2,000 per month nationwide.”
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This article $420,400 Median Home Price Makes Homeownership A Distant Dream For Gen Z originally appeared on Benzinga.com
Bridget Roy is a news writer for Gibbs Press, where she covers sports, education, and tech. She's also a dedicated educator and advocate for children's rights. In her free time, Bridget likes to read, watch movies with her family, and play video games. She says that while she loves all of those things, they pale in comparison to her love of writing.
