2024 Aspiring Homeowners Report
Will 2024 be the year for aspiring homeowners? Interest rates rose to a generational high of 7.44% by November 2023, and there was a lack of supply for potential buyers, so 2023 was a wash for many who hoped to buy a home. One in five potential homeowners failed to purchase in 2023, and housing affordability was a major buyer concern. Luckily, economic signs indicate that inflation is cooling off, and lower interest rates may follow, so homeownership looks more promising for 2024.
The This Old House research team surveyed 3,000 aspiring homeowners to learn whether they believe homeownership is within reach and their biggest homeownership barriers.
1 in 5 Aspiring Homeowners Failed in Their Attempts To Purchase in 2023—Most Plan to Try Again in 2024
Our survey indicated that while one in five aspiring homeowners couldn’t follow through with a home purchase in 2023, most plan to keep trying. Seventy-two percent of unsuccessful buyers still have plans to purchase a home in 2024. So, what were the reasons would-be buyers were unsuccessful in 2023?
Costs were a significant deterrent. A full 65% stated that home prices were currently too high for them to purchase a home. Another 54% cited high mortgage rates as the reason. Other related costs that prevented people from buying included moving costs (36%) and the high price of a down payment (35%).
Affordability Is the Biggest Obstacle for Aspiring Homeowners Who Are Not Pursuing Homeownership in 2024
A full 85% of non-homeowners still hope to pursue the American Dream at some point, but what about the remaining 15% who don’t feel homeownership is in their future?
Nearly half (47%) of those who don’t plan to buy a home in the future say it’s because they don’t think they’ll ever be able to afford it. Considering the median home price across the United States was $431,000 for the third quarter of 2023 and median household income hovers around $75,000, it’s no surprise that many people find affordability the biggest barrier to homeownership. Even 57% of those who hope to buy one day say that home prices are their biggest obstacle, followed by the expense of a down payment (48%) and current mortgage rates (34%).
Interestingly, 13% of aspiring homebuyers are waiting to see how the 2024 presidential election will impact the economy. Nearly one-third (32%) of those not planning a purchase in 2024 believe a Donald Trump presidency would be most beneficial to the market, while 24% believe a second Joe Biden term would have the most positive impact.
77% of Potential 2024 Homebuyers Believe Housing Inventory Will Increase, but Just Half Believe the Market Will Cool
A majority of aspiring buyers are optimistic about the housing market. Fifty-one percent of those who plan to buy in 2024 are hopeful home prices will decrease. Seventy-seven percent think inventory will increase in 2024.
Affordability remains a major concern despite this optimism. Seventy-six percent of prospective homeowners plan to use a down payment program, but they may not have a mortgage secured. Only 42% of potential 2024 buyers are preapproved for a mortgage.
9 in 10 Aspiring Homeowners Are Willing To Compromise or Change Their Plans if It Means Achieving Homeownership in 2024
Buyers feel increasingly desperate despite their optimism about favorable 2024 housing conditions. A full 92% of aspiring homeowners are ready to change their strategies for securing a property.
Fifty-eight percent of these potential 2024 buyers willing to compromise said they would increase their budget if necessary, with nearly a quarter (23%) saying they would offer above the asking price. This desperation also extends to mortgage rates: 30% would settle for a mortgage rate higher than 6% if it meant they could finally purchase a home.
Other prospective buyers are planning to make adjustments to their housing plans. Settling for less square footage would be acceptable to 43% of potential 2024 buyers, while 50% are willing to move to different areas than originally planned. Thirty-one percent looking to secure funding would be willing to ask family members for money, while 30% are willing to speed up their time line if it means buying as soon as possible.
Sacrificing on Style
Not only are aspiring 2024 homeowners willing to compromise on time line and budget, but most know they may need to compromise on other aspects of their dream home. Most potential buyers (71%) are looking for a single-family home, including 34% who would have their hearts and wallets set on a new construction home and 28% who would prefer to purchase something renovated.
However, 55% of buyers who would prefer a new construction home say they’d settle for something else, including 31% who would buy a renovated home and 26% who would buy a townhome. Fifty-four percent of those who would prefer a renovated home said they would be willing to pivot their plans, including 41% who would settle for a fixer-upper, single-family home if they had to.
The Best Cities for Aspiring Homeowners
The mantra for 2024 homebuyers regarding affordability might be: location, location, location. Our team ranked 148 cities in the United States based on affordability, home prices, down payments, and mortgage rates. We also examined the housing market’s inventory and whether homes sell quickly.
Provo, Utah, ranked No. 1 for aspiring homeowners. We found its median annual homeowners insurance premium was $1,194, and there was a 10% decrease in the price per square foot of homes over the past six months. Provo also boasts a median down payment of $35,317. This is 69% less expensive than a $112,400 down payment in San Francisco, California—the least friendly city on our list for aspiring buyers. A down payment in San Francisco will cost homebuyers over $112,000.
Tips for Pursuing Homeownership in 2024
There are many ways to set yourself up for success if you hope to pursue homeownership in 2024.
- Find a budget-friendly location: Many costs contribute to homeownership, but researching property taxes in the area, putting down more money up-front, and looking for Federal Housing Administration loans could help you avoid more expenses down the road.
- Secure a mortgage preapproval: Securing a preapproval from a lender early in your buying journey allows you to move faster and make more informed offers on homes you’re interested in.
- Protect yourself from the unexpected: Shop for homeowners insurance and home warranty policies that work best for your budget.
- Making a moving budget: Compare rates across multiple moving companies and use quote calculators to avoid surprises on your moving bill. Consider moving during off-season months to potentially save thousands.
Expert Tips and Insights
We turned to a panel of experts to learn about their observations of the housing market and what aspiring homeowners can anticipate this year. Read their tips and insights below.
The research team at This Old House Reviews surveyed 3,000 non-homeowners in the U.S. to determine their aspirations for homeownership, whether they plan to pursue homeownership in 2024, and what barriers to homeownership they currently face. The survey was administered December 9 and 10, 2023, with a 2% margin of error.
We ranked 148 cities across the following metrics to determine the best cities for aspiring homeowners:
- Percentage of owner-occupied housing units with householder aged 25–44
- Percentage change in median sale price from May to October 2023
- Percentage change in median price per square foot from May to October 2023
- Median down payment
- Median annual home insurance premium
- Percentage change in days on market for homes from May to October 2023
- Median annual real estate taxes paid
- Sharecare’s Community Well-Being Index
- Violent crime rate per 1,000 residents
Sources: U.S. Census 2022 American Community Survey, Environmental Protection Agency, Redfin.com, Quadrant, Sharecare, NeighborhoodScout, etc.
We’ve excluded cities for which comprehensive data was not available.
Questions about our study? Please contact the author here.
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