2025 Aspiring Homeowners Report: 70% Fear They Will Never Own a Home

Owning a home remains a big goal for many Americans. However, rising prices and limited inventory present substantial challenges. According to the National Association of Realtors (NAR) 2024 Profile of Home Buyers and Sellers, the national median sale price for homes reached $435,000, nearly doubling since 2014.

To explore the realities of today’s first-time homebuyers, the This Old House research team surveyed 2,000 aspiring homeowners and analyzed data from Redfin, a national real estate brokerage. This report uncovers the biggest hurdles and opportunities for those who want to make their homeownership dreams a reality in 2025.

70% of Aspiring Homeowners Say Prices Are Too High, and 41% Expect Them To Get Even Higher

The housing market remains a significant challenge for aspiring homeowners. As of October 2024, the national median sale price for a home was $435,000, far above the $200,000 that most respondents said they could afford—a gap of $235,000. 

Home prices have nearly doubled since 2014. Our respondents estimated the typical home price at around $300,000. Over the past five years alone, home prices have surged by 48%, while inventory has decreased by 24%, making it increasingly difficult for buyers to find affordable options.

This sharp price increase has created a sense of unease among aspiring homeowners. Our survey found that 70% consider high prices a major obstacle to homeownership, and 70% are concerned that they may never be able to afford a home.

Additionally, 62% believe the current market is biased against first-time buyers, and only 18% of respondents feel that now is a good time to buy. Just 16% plan to purchase a home within the next year, and only 18% believe they could afford one today. In addition, 41% of respondents expect home prices to continue rising in 2025, adding to the growing sense of frustration and uncertainty in the housing market.

Aspiring Homeowners Are Worried About Down Payments, and 78% Believe the Government Should Help

Down payments remain a major barrier for many aspiring homeowners. Nearly half (43%) of respondents said they can’t save for a down payment, with a 20% down payment on the median home price of $435,000 requiring a daunting $87,000. For context, that’s over a year’s salary for many Americans—the median household income was $77,719 in 2023, according to the U.S. Census American Community Survey. 

To overcome this hurdle, 51% of respondents plan to put down less than 20%. This typically requires mortgage insurance, adding to their monthly expenses if they choose to go this route. Reflecting on the financial challenges of homebuying, 78% of respondents believe the federal government should provide down payment assistance to first-time homebuyers.

Aspiring homeowners are also making sacrifices to save for their future homes, including 37% who are delaying vacations and 23% who say they’ve taken on a second job or side gig.

Would-Be Homeowners Are Willing To Compromise on Location and Size for a Good Deal

Aspiring homeowners are increasingly ready to make sacrifices to achieve their homeownership goals. Half (50%) of respondents don’t believe they can find an affordable home in their current area, but many are open to relocating. Most aspiring homeowners (61%) are willing to move neighborhoods, while 29% are willing to move to an entirely different part of the country.

Compromises aren’t limited to location—many are also flexible on the features of their future home:

• 55% would consider a smaller home if it meant getting a good deal.
• 39% are open to a longer commute.
• 36% would forgo having a yard.
• 33% are willing to compromise on school district quality.
• 21% would accept a less safe neighborhood.

However, buyers draw the line at certain risks: Just 15% would buy in an area with a high risk of natural disasters, even for a good deal.

Best Cities for Aspiring Homeowners

We used monthly data from Redfin to find the best cities for aspiring homeowners. We ranked the 100 biggest U.S. cities on median home price, price per square foot, and new listings to see where homeownership is the most achievable for first-time buyers. We looked for cities where the median sale price was closer to the median $200,000 budget of the aspiring homeowner, the cost per square foot was low, and there were more new listings per population. 

We found that the best cities for aspiring homeowners are El Paso, Texas, St. Louis, Wichita, Kansas, Philadelphia, and New Orleans. These cities have prices below the national median, and many of them are showing price decreases. In addition to being an affordable market for aspiring homeowners, Philadelphia was one of the most popular cities for Gen Z to move to in 2023.

Full Data

Tips for the First-Time Homebuyer

The homebuying process can feel overwhelming—77% of aspiring homeowners agreed. However, careful planning can help you navigate it confidently. Here are some tips to address the most intimidating aspects:

• Get pre-approved for a mortgage: Understand your budget and secure preapproval early to strengthen your offers. Check to see what options your current bank has. First-time homebuyers may also qualify for specialized loans like FHA loans, which require lower down payments, or VA loans for veterans with no down payment requirements.
• Learn about loans and interest rates: Compare fixed and adjustable-rate mortgages, and use online calculators to see how interest rates impact your monthly payments. Look for programs offering favorable terms for first-time buyers, such as state-backed assistance programs.
• Find a trustworthy agent: Choose an agent with experience, strong reviews, and clear communication. Interview several to find the best fit, especially those knowledgeable about first-time buyer programs. Ask friends and family if they have recommendations.
• Prepare for closing costs: Closing costs typically range from 3–5% of the home price. Request an estimate from your lender, and explore grants or assistance programs designed to reduce expenses for first-time buyers.

Considering cost is the biggest barrier for many aspiring homeowners, finding ways to save in other areas can make the dream of homeownership more achievable. One option after buying your new home is to work with a cheap moving company, which can help minimize relocation expenses while ensuring a smooth transition to a new home.

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.

Rebel Cole, Ph.D.

Professor of Finance

College of Business of Florida Atlantic University

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What tips or suggestions do you have for homeowners who are still trying to navigate the housing market in 2024?

Interest rates are falling and are likely to continue to do so. If you can wait, then wait. If you can’t wait but need financing, go with an adjustable rate mortgage, which is much cheaper than a fixed rate mortgage, and then plan to refinance in 12-24 months.

What are some things people should consider when looking for a home in a specific city? 

There are three things that matter in real estate: location, location and location. Find the location that best fits the needs of your family.

Affordability is one of the biggest obstacles for homebuyers in 2024. What financial advice could you provide for aspiring homeowners? 

Prices are not likely to fall much in the coming year because there is very limited supply but strong demand, in spite of high prices and high mortgage rates. If you can wait until 2025, mortgage rates should be much lower. If you can’t wait and need financing, go with an adjustable rate mortgage, which is much cheaper than a fixed-rate mortgage, and then plan to refinance in 12-24 months.

Dr. Cole is the Lynn Eminent Scholar Chaired Professor of Finance in the College of Business at Florida Atlantic University in Boca Raton, FL. Previously, he has taught at DePaul University in Chicago, the University of New South Wales in Sydney, Australia and the University of Auckland in New Zealand. He received his PhD in Business Administration from the University of North Carolina in 1988, after which he spent ten years working as a financial economist in the Federal Reserve System. Dr. Cole is a special advisor to the Asian Development Bank, the International Monetary Fund, the World Bank and other non-governmental organizations, providing training and technical assistance to central banks around the world in more than 60 countries.  Dr. Cole has published peer-reviewed articles in many top academic finance journals, and his research has been featured in the Financial Times, the New York Times and the Wall Street Journal. His primary areas of research are corporate governance, entrepreneurship, financial institutions, and real estate.

Ying Huang Johnson, Ph.D., MS, MCRP

Associate Professor in Finance & Real Estate

University of South Alabama

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What tips or suggestions do you have for homeowners who are still trying to navigate the housing market in 2024?

I think the inflation will not go down further, housing prices might stay high. Even though the Fed pivoted last month and said they are going to cut rates. But, interest rates will not drop drastically unless we are in a recession. I probably would observe how much the interest will be and decide because what dwarfs most buyers is the high mortgage rate, currently, almost 8% on average.

What are some things people should consider when looking for a home in a specific city?

I would be looking at smaller houses within the target neighborhood. The reason is that smaller houses are cheaper than other houses in the neighborhood while it will appreciate as much as other houses. Moreover, smaller sized houses in a neighborhood go fast when it is time to sell.

Affordability is the one of the biggest obstacles for homebuyers in 2024. What financial advice could you provide for aspiring homeowners?

Given high mortgage rates, I would stay in budget and do a fixed rate mortgage. Probably a 30-year fixed mortgage. In the years before 2020, I would recommend using a 15-year fixed mortgage to pay less total interest and shorter time to pay off compared to a 30-year fixed rate mortgage. However, in the current mortgage market, a 30-year fixed rate might work better because the monthly payment is lower relative to a 15-year fixed rate mortgage. Then, when the rates go down later, homeowners can refinance.

The focus on Dr. Johnson’s research and consulting work is on the subjects of corporate finance, microstructure research, and real estate.  In addition, she has expertise in school evaluation and GIS applications in real estate research. She has received numerous research grants and two best paper awards. Dr. Johnson has authored (or co-authored) many articles in journals and conference proceedings in the finance literature.  In addition, she has received a number of awards from American Real Estate Society (ARES).

Melanie Jewkes

Extension Professor in Family & Consumer Sciences

Utah State University

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What tips or suggestions do you have for homeowners who are still trying to navigate the housing market in 2024?

Take a homebuyer course, especially if you are a first time home buyer. Look for courses that are HUD-approved that meet standards protecting consumers. One such course is the Utah State University Extension online Homebuyer course that is HUD- and USDA rural housing approved. It also qualifies as an approved course for any HUD or USDA rural housing homebuyer programs that assist with downpayment or closing costs.

Consider your lifestyle. Your lifestyle will help you identify the type of house that you should purchase. Consider writing a wants/needs list. Navigating the market knowing what you can and cannot live without will help narrow the search.  

It’s okay to wait it out. Living the American dream of owning a home may not be feasible to your pocket this year. Buying a home may enhance your life but could cause stress to your finances. If you don’t buy a home this year it doesn’t mean you won’t ever be a homeowner.  While you wait, work on decreasing your debt-to-income ratio and building savings for closing costs and downpayment.

What are some things people should consider when looking for a home in a specific city? 

Choosing a great Realtor.  A Realtor is much more than a professional who organizes the transaction between the buyer and the seller. They search for a home that meets your needs within your price range in a desired area. Seek referrals from friends and family members that know of agents who know the area you hope to buy in.  

Look for grants and home buyer assistance from the city, county or state level governments. Often, there are programs that provide help with down payment or closing costs to qualified households.  

Affordability is one of the biggest obstacles for homebuyers in 2024. What financial advice could you provide for aspiring homeowners? 

Work with your spending plan to determine what mortgage payment you can afford. Remember that a mortgage payment is not only principal and interest on the mortgage loan – it will also include escrow for homeowners insurance and property taxes, and could even include private mortgage insurance if you don’t have a 20 percent down payment on the mortgage. 

Melanie D. Jewkes is an Extension Professor with Utah State University, based in Salt Lake County. She earned both a bachelor’s and master’s degree in Family Finance. With 16 years’ experience in community educational programs, she oversees programs in family finance, nutrition and food preservation. She directs the USU Extension HUD and USDA Rural Housing approved online homebuyer education course and the free PowerPay debt elimination program. Find more information at finance.usu.edu.

Methodology

The research team at This Old House surveyed 2,000 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 between November 7–9, 2024.

To determine the best cities for aspiring homeowners, the research team analyzed monthly market data from Redfin, a national real estate brokerage. Data were collected in November 2024, with data current up to October 2024. Additional population statistics came from the U.S. Census 2023 American Community Survey 1-Year Estimates. We ranked the 100 most populous U.S. cities on the following metrics:

• Median sale price relative to the median budget of an aspiring homeowner ($200,000)
• Year-over-year change in median sale price from October 2023 to October 2024
• Median price per square foot
• Year-over-year change in median price per square foot from October 2023 to October 2024
• Number of new listings per 1,000 population
• Year-over-year change in new listings from October 2023 to October 2024

Questions about our study? Please contact the author here.

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