A charming house with a lawn and a white picket fence is one of the most evocative images of the American Dream. The United States was once seen as a country where anyone willing to work hard would be able to afford a secure housing situation. However, nowadays many Americans find this dream to be more and more elusive. In 2021, nearly 22 million American households were
, a figure that has increased since 2019. A 2022 survey found that more than a third of those renting
.
Rent is a heavy burden on the household budget of many Americans
Rents have r
isen dramatically in recent years. In 2023, renters with an average hourly wage earned
just slightly above the amount needed for a one-bedroom apartment. A two-bedroom apartment was out of reach for 60 percent of the population. Additionally, a substantial disparity in affordability could be seen among different races: Black and Latino renters earn lower wages on average, meaning that
a lower percentage of people within these groups had sufficient income for a two-bedroom apartment. Housing affordability is often a barrier to the economic development of cities. If people cannot find housing where job opportunities are, businesses struggle to find workers. The median wage
across many occupations vital to the economy fell short of the necessary income for rental housing. Professionals, including food and beverage serving workers, motor vehicle operators, administrative support workers, and retail sales workers, were some of the occupations with hourly income below the necessary for renting an apartment.
Getting on the property ladder is not an easy task either
House prices
have risen even faster than rents, making homeownership unattainable for the average American. In 2022, the average household in the U.S.
did not earn enough to qualify for a mortgage. Only about 15 percent of American renters could afford to buy the median-priced home in 2022, but in some regions of the country,
homeownership was more unattainable than in others. In El Paso, TX, Syracuse, NY, Rochester, NY, and Wichita, KS, about one-third of renters could afford the median-priced home in their metro. On the other end of the spectrum were metros such as Los Angeles and San Diego, CA, where less than five percent of renters earned enough to become homeowners. Overall, the overwhelming majority of Americans could only afford less than 50 percent of the homes for sale in their market. Surprisingly, Gen Z and millennial homebuyers
reported a more positive affordability outlook than Gen X and baby boomers. In the second quarter of 2023,
one-third of millennials who wanted to buy a house had been on the lookout for longer than three months because they could not find a home within their price range. Even when homebuyers spot a home that checks all the boxes for them, there is no guarantee that other bidders will not outbid them.
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