The dream of homeownership is getting further out of reach for millennial and Generation Z Americans as more buyers fight over fewer homes.
It’s the worst of times for young Americans looking to buy a home.
Already wracked by years of economic chaos, rapid inflation, and dwindling early-career job prospects, Americans in the millennial and Generation Z cohorts are now facing an affordability crisis when it comes to homes.
While prices are rising for most everything in the United States, the price of both a new home and rent has skyrocketed since 2020—both are up by 25 percent or more.
Economists who spoke with The Epoch Times said that a slowly falling mortgage rate will help alleviate the crisis, but the only realistic solution requires building millions of new, affordable homes.
Affordability Crisis
In the past five years, the cost of housing has exploded in the United States.
Between the beginning of 2020 and the middle of 2025, the median sold-for price of all houses in the United States increased by about 24.9 percent to $410,800 from $329,000, according to Federal Reserve Economic Data (FRED).
During the same period, the average price of rent, as measured by FRED, rose by about 28.9 percent.
Meanwhile, real earnings for full-time hourly and salaried employees have remained relatively stagnant. Between the first quarter of 2020 and the second quarter of 2025, according to FRED, wages have grown by about 2.5 percent.
Economists typically gauge affordability by comparing median household income with the median cost of a home, according to Robert Dietz, chief economist at the National Association of Home Builders.
The Census Bureau estimated the median American household earned $83,730 in 2024. That, he said, places the price-to-income ratio close to five-to-one when it is typically closer to three-to-one.
“We’re near a decade low measure of affordability,” Dietz said.
American families now need about 25 percent of their monthly income to make a payment on their mortgage, Nadia Evangelou, senior economist and director of real estate research at the National Association of Realtors, told The Epoch Times. That’s up from 16 percent in 2019.
