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Locked Out: Most Renters Anticipate a Lifetime Without Homeownership


With interest rates spiking and mortgage lenders pulling back, renters are turning increasingly glum about their future homebuying ability. According to recent findings from the 2023 NY Federal Reserve Bank’s SCE Housing Survey, the average renter expects that they will be renting for life.[1]

Borrowing costs loom large for the growing pessimism. Expectations of mortgage rates have nearly doubled in just two years. In 2021, the average interest rate on a 30-year fixed-rate mortgage that individuals thought they could qualify for was 3.4%. In 2023, that number jumped to 6.3%. On average, renters believed the rate they would qualify for was 8.1%.

For Americans hoping to access homeownership, not only have financing costs become more expensive, but they also anticipate difficulty qualifying for a mortgage due to tight underwriting standards. According to the survey, 65.9% of people anticipate it would be difficult to obtain a mortgage if they wanted to buy a home today, rising from 63.2% in the 2022 survey.

While some renters are forced to delay buying until there are more favorable conditions, many renters now expect there’s a good chance they will never own a home in their lifetime. In 2023, American renters put the probability that they would ever own their own home at just 44.4% — marking the second year in a row below 50%. While housing supply and demand conditions are fluid over the long run, current sentiment and market conditions should create upward pressure for rentals.

Despite low expectations about being able to buy a home, American renters would still prefer homeownership. If given access to the necessary financial resources, 69.8% of American renters would prefer owning instead of renting. For Americans under the age of 50, 81.0% of respondents would prefer ownership, underscoring that expectations to never own a home are out of necessity and not preference.

[1] SCE Housing Survey is a section of the Federal Reserve’s Survey of Consumer Expectations that track the expectations of homeowners and renters across the US on an annual basis.


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