Has Homeownership Become A Luxury Good?

Homeownership is the top means by which the typical American accumulates and builds wealth, and that has never been truer than today.

Homeowners are the winners in today’s housing market, experiencing large gains in home equity across the board. These gains allow homeowners to make all-cash purchases on their next homes, remodel or sit on their wealth. While the stock market is for Wall Street, real estate is for Main Street America.

But as homeowners continue to make financial gains in the housing market, young adults are being left behind. Before the global financial crisis, the typical share of first-time homebuyers among all buyers was 40%. Today, that figure has dropped to 21%, according to the National Association of Realtors‘ 2025 Profile of Home Buyers and Sellers.

Four decades ago, the median age of a first-time homebuyer was 28, but today it’s 40, according to the same report.

In addition, the 2024 homeownership rate for those under 35 continued a two-year decline and fell to 37.1%. Unfortunately, the millennial homeownership rate has never reached the level that Gen Xers and baby boomers experienced at the same age.

The first-time buyers who have been able to achieve homeownership have higher incomes and are wealthier than in years past. First-time buyers are now more likely to use financial assets for their down payment. A shrinking share of first-time buyers use generational transfers, such as gifts or loans from mom and dad.

The bottom line is that fewer homeowners are achieving wealth gains through homeownership. And for those who do, it means 10 years of lost housing wealth over a lifetime — a loss estimated at $150,000.

This begs the question: Has homeownership, once part of the American dream, become a luxury good?

The hurdles to homeownership are numerous, but for many, they can be summed up by a lack of housing inventory and an affordability crisis. Certainly, high rents, student debt, credit card debt, auto loans and child care costs are also enormous factors for young adults to consider when saving for a down payment.

How does America overcome this crisis in housing? We must build more affordable housing inventory. Underbuilding is not new, and the problem has persisted since construction activity tightened more than a decade ago.

While there has been an increase in the number of existing homes, they are only now near the level they were in 2020. School teachers and first responders are being priced out of the communities where they work.

The U.S. is missing approximately 4.7 million homes to properly house the population. There is not one solution for every community, but addressing the housing crisis through proactive approaches to building will help bridge the gap.

Consider having a community revitalize a vacant hotel, motel, school or mall into residential units through adaptive reuse. Embrace rezoning to build condominiums and townhomes on single-family lots. Allow accessory dwelling units. These unique types of housing can address the housing shortage and find unique ways to help millions achieve the American dream.

Don’t settle for only the data. Learn how to harness it to make better and faster decisions. Find the signal at the Housing Economic Summit. Join us in Dallas on Feb. 10.