Over the past several years, spiking mortgage rates paired with a 40% increase in national home prices have created a major affordability crisis for prospective homebuyers, with younger generations affected the most. Despite already spending around 30% of their income on housing, two-thirds of Millennials surveyed by Bank of America in its eighth annual Millennial housing survey said they still plan to buy a home within the next two years.
While many still believe buying a home is a profitable investment, other respondents are choosing to distance themselves from the housing market due to prolonged affordability challenges, Fortune reports.
That lack of affordability is why “attaining the American dream is becoming more challenging than ever,” Bank of America (BofA) analysts wrote in its eighth annual millennial housing survey published on Friday.
“By almost every measure—rents, home prices, interest rates—this group expects to pay more for housing even as it already takes up one-third of their household income,” BofA analysts found.