Is The "American Dream" of Homeownership Changing?

Question

𝐈𝐬 𝐭𝐡𝐞 “𝐀𝐦𝐞𝐫𝐢𝐜𝐚𝐧 𝐃𝐫𝐞𝐚𝐦” 𝐨𝐟 𝐇𝐨𝐦𝐞𝐨𝐰𝐧𝐞𝐫𝐬𝐡𝐢𝐩 𝐂𝐡𝐚𝐧𝐠𝐢𝐧𝐠?

Recent data from Zillow’s Consumer Housing Trends Report reveals a notable shift in how Americans view housing choices: nearly 3 in 5 renters now plan to continue renting over the next year, even if mortgage rates fall. Key takeaways:

Homeownership rates have declined to levels not seen since 2019, with ownership at 65% in mid-2025.

Younger adults are especially less likely to buy, with ownership among household heads under 35 remaining low.

Renting isn’t just a fallback, it’s increasingly a purposeful choice: families and professionals are staying in rentals longer, valuing flexibility, mobility, and lower maintenance responsibilities.

Zillow forecasts modest home price growth and stabilizing market conditions through 2026, but mortgage rates are expected to stay elevated, reinforcing renting’s appeal for many.

Affordability metrics are improving modestly as incomes outpace rent growth in many major markets, further supporting long-term renting.

The narrative around renting is evolving. Instead of being viewed strictly as a temporary step toward owning, renting is increasingly seen as a strategic housing choice aligned with lifestyle preferences and changing economic dynamics.

Michael Carbonare · Answer

Abel,Good points. But I take everything Housingwire writes with a grain of salt and skepticism. They are forever bullish, regardless of what is happening in housing. "It's always a good time to buy" simply isn't true.The northeast market is certainly an outlier. As an ex-NYer, (Brooklyn, Long Island), I cannot understand the resilience of that market. Prices are spiking, taxes are rising, and politics that leave me shaking my head. Must be the pizza.

Kenneth Garrett · Answer

@Michael Carbonare

It certainly has changed. The cost is not just housing when you add in the insurance, property taxes, utilities, groceries, etc it’s really tough. I feel for my two daughters who are adults now, but will take really good incomes for even just a starter home.

Not sure the answer, but as wages increase so does everything else. You’re just treading water.

I started investing after the 2008 crash. You were able to buy properties at half or greater reductions than the value in 2006/2007. That was a crazy time, but it was scary.

Couldn’t agree more.

Steven Destine · Answer

The interesting shift isn't just that people are renting longer, it's that tenant expectations are changing with it. If someone is choosing to rent strategically rather than renting because they can't buy yet, they expect a completely different experience from their landlord and their property.

I think this is actually good news for professional investors who treat rentals like a real business. The "intentional renter" crowd wants quality, responsiveness, and fair treatment, and they'll pay for it. They're also way more likely to renew if you're not a slumlord. The downside is they have zero tolerance for deferred maintenance or sketchy lease terms because they know they have options.

The part that concerns me is whether this "strategic choice" narrative is genuine preference or rationalized necessity. At some point incomes catch up and rates normalize, and if that whole cohort suddenly decides to buy, rental demand could shift fast. I'm not betting my portfolio on renters staying renters forever just because Zillow says it's a lifestyle choice in 2025.

What are you seeing in Fort Lauderdale specifically? Is the renter pool actually changing in quality and expectations, or is it still the same people just staying longer because they're priced out?

Abel Curiel · Answer

Yup! and the bagels!

I'm still surprised every day myself.

High rents are the main reason people still target NYC and surrounding areas. Some high-priced submarkets (i.e. Astoria, Queens) have seen flattening multi-family values over the last few years BUT rents for 1-3 bedroom apts have climbed 15-25% in that timespan.

Long Island is becoming increasingly untouchable. Even the off-market 'deals' are very close to retail. Suffolk median days on market last month was just 14! Competition is through the roof. Westchester is in a similar boat.

NYC politics will keep pushing homebuyers looking for a certain lifestyle out to the suburbs.

I appreciate the insights on housingwire, I've been following them for a few months. None of their data seems to apply to NY, taking it with a healthy level of skepticism is a good approach.

Michael Carbonare · Answer

Steven, I don't have specific data to back up what is just my opinion. But from what I see and hear, many folks are renting out of necessity due to the cost of homeownership in the area. On top of a median price of around $425K, (and that's conservative; that number will limit you to some rough and tumble properties and neighborhoods), that renter must factor in taxes, (high), and homeowners insurance, (stratospheric). So it's $5K/mo PITI, or $3K/mo rent.

Steven Destine · Answer

Those numbers make complete sense, my wife and I decided to buy our primary residence a few years back and kept asking ourselves did we make a mistake by not continuing to rent. Question is still in my head at times. Thanks for the insights.

Abel Curiel · Answer

Hello @Michael Carbonare,

I think most homebuyers are purchasing property based on necessity - i.e., relocation, needing more space, downsizing, etc.

I agree with your findings here. I am seeing a lot of people in the 25-40 age range deciding to rent to invest elsewhere (OOS Rentals, the Stock market, etc.), kind of what Grant Cardone preaches.

In expensive markets like mine, it is very common for folks to rent until their late 30's/early 40's.

Although nationwide inventory is up about 13% and recent unemployment reports have fallen below the 4-week average, I don't think affordability will improve anytime soon.

Housingwire expects the # of existing home sales to increase by about 5-6% if mortgage rates stay at or below 6.25% and the national inventory reports seem to support this prediction.

I spoke with a broker in Phoenix who believes his market's piling inventory is a good sign for buyers, investors, and overall market activity.

However, high-demand markets with low inventory don't seem to be moving in a positive direction for homebuyers and those waiting for a more affordable market. In some NYC submarkets, inventory is down as much as 40% (from '24 to '25) and property values are climbing as high as 12% YOY.

Is The "American Dream" of Homeownership Changing?

Is The "American Dream" of Homeownership Changing?

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