Buying a home has gotten harder for young adults in most U.S. metro areas

Young adults in the United States are confronting a widening gap between home prices and incomes, a new analysis shows, pushing the dream of homeownership further out of reach for many. The price-to-income ratio for households headed by those under 40 has climbed to levels not seen since the mid-2000s housing bubble. About nine-in-ten adults younger than 40 say it is harder for young adults today to buy a home than it was for their parents' generation, according to a Pew Research Center survey [1]. The inflation-adjusted median home value rose 30% between 2019 and 2024, while the median household income for the same age group increased only 9% [1]. The resulting price-to-income ratio reached 3.5 in 2024, up from 2.9 in 2019 and matching the peak of 3.6 recorded in 2006 [1]. The U.S. economy, the world's largest by nominal GDP, has achieved relatively steady growth and low unemployment since the end of World War II, yet housing affordability for younger cohorts has deteriorated sharply in recent years [2]. Mortgage rates have compounded the pressure. The average 30-year fixed mortgage rate rose from 3.9% in 2019 to 6.7% in 2024, according to Freddie Mac [1]. For a median-priced home with a 3.5% down payment, monthly costs jumped from $1,689 to $2,776 over that period [1]. The share of renter households under 40 with enough income to cover those monthly costs fell from 56% in 2019 to 37% in 2024 [1]. Down payments present a separate hurdle. A Federal Reserve survey found that 70% of renters under age 40 said they rent rather than own because they cannot afford a down payment [1]. The cash needed for a 3.5% down payment plus closing costs climbed from roughly $17,500 in 2019 to about $22,800 in 2024 [1]. The affordability squeeze is widespread across metropolitan areas. Median home values grew faster than the median income of young adult households in 142 of 160 metro areas analyzed between 2019 and 2024 [1]. In 2019, 59% of those metros were classified as very or somewhat affordable for households under 40; by 2024, that share had flipped, with 61% rated as somewhat or very unaffordable [1]. Despite these headwinds, 67% of Americans still say buying a home is a good investment, though adults under 40 are less likely than older adults to call it a very good investment [1]. The United States maintains the world's largest consumer market and a highly flexible labor market, but income inequality remains among the highest of developed countries [2].