Despite Majority Viewing It As a Life Goal, Some Americans Less Confident They’ll Own a Home: BMO Real Financial Progress Index

With the traditional spring homebuying season underway, the latest BMO Real Financial Progress Index finds a mix of strong interest and concern surrounding the U.S. housing market. Interest in home ownership remains strong as 66% of Americans view owning a home as a major aspiration in life, consistent with a year ago. However, 61% of Americans say they feel less confident they will own a home in their lifetime than they were five years ago.  

For younger generations, 71% of Millennials and 69% of Gen Z report owning a home is a significant life aspiration and 54% of American renters feel envious of those their age and younger who have purchased a home. Younger-generation American renters whose earning, investing and home-buying prospects were affected by the Great Recession of 2008 and Covid-19 pandemic are most likely to feel this way, with 67% of Millennials and 63% of Gen Z who do not own homes envious of peers who do.

“The data show that owning a home remains a key component of the American Dream, but with some obstacles still facing first-time homebuyers, younger generations worry they missed their moment. It’s important to remember that whether the dream is to own a home or whether someone is comfortable renting, working with a financial professional and making use of financial tools from your bank can help build an action plan to make financial progress and responsible decisions toward long-term goals.”  

– Paul Dilda
Head of U.S. Consumer Strategy, BMO

Waiting for conditions to be “just right” 

Despite fears of missing their window to buy, younger prospective buyers still seem to have clear ideas about their ideal “Goldilocks” conditions to purchase: 

• The Right Rate: 69% of Gen Z renters and 74% of Millennial renters who intend to buy a house are waiting for interest rates to drop before making a purchase decision. 

• The Right Size: Although young Americans have their sights set on becoming homeowners, they are skeptical of a “starter home.” Roughly two-in-three Gen Z renters (66%) and three-in-five Millennial renters (61%) agree that buying a starter home and upgrading to a bigger one a few years later “makes no sense anymore,” indicating that younger generations are more interested in a buying a home for the long-term.  

• The Right Time: Many non-homeowners have put their aspirations on hold because of competing priorities. This is particularly true for parents: 57% of non-homeowners with children say that saving for education or childcare is a more important financial priority than buying a house. Other top financial milestones that younger non-homeowners prioritize above home buying include Gen Z’s focus on purchasing a car (50%) and Millennials’ desire to save for retirement (54%).  

• The Right Risk Appetite: 48% of Americans regardless of age or housing situation responded that they expect climate-related factors to impact their living choices in the next five years—a 7-point increase from 2024. In particular, 65% of Gen Z and 55% of Millennials believe that the risk from factors such as storms, wildfires, floods or heatwaves will affect where they choose to live in the near-term. Further, 60% of American renters say home insurance costs or availability may affect their ability to buy a home, an 8-point jump from last year. 

“The financial hurdles to owning a home have rarely been higher, especially for young households that don’t yet have their foot in the door “Poor housing affordability, limited inventory of existing homes, and rising interest rates make finding the right home that fits your budget a challenging endeavor. The good news is economic and financial conditions can change quickly, so it makes sense to start planning today.  With the right conditions and early planning, younger Americans will still likely be able to attain their goal of homeownership.” 

– Scott Anderson
Chief U.S. Economist, BMO

Young homeowners buy with a little help from family and friends 

A majority of both Gen Z and Millennial homeowners report they are more dependent on family, such as “the bank of mom and dad”— 60% of Gen Z and 57% of Millennials say they could not have purchased a home without financial support from their families. 

For Gen Z in particular, familial help is a key component of their financial lives. Nearly six-in-ten (58%) Gen Z-ers expect to receive or ask for financial help from parents or grandparents sometime this year. Nearly one quarter of Gen Z (23%) anticipate getting help with general expenses, and 16% expect family will contribute to the down payment towards a home. Overall, 83% of Gen Z identify family as important to achieving their financial goals.   

Younger Americans are also more likely to embrace alternative routes to homebuying:   

• If you can’t beat the market, join forces: To spread the cost of purchasing a home, 57% of Gen Z and 54% of Millennial non-owners would consider “co-buying”—purchasing a home with friends, family members or other people with whom they have no romantic involvement. Buying with non-romantic partners is less appealing beyond those two generations, as only 44% of Gen X and 27% of Boomers would consider a similar arrangement. 

• So, it’s a bit of a fixer-upper: Most Americans are open to investing their time, finances and hard work into a “fixer upper.” Three in five Americans are willing to buy a home that needs some renovation, including 63% of Gen Z, and 65% of Millennials and Gen X. However, just 37% of Boomers want to spend their retirement years fixing up a new home.     

• Location? Location? Location?: Similarly, many Americans looking to buy a home are open to uprooting their families to afford their dream: 56% of Gen Z, 63% of Millennials, and 57% of Gen X are willing to move to a different state or country to afford a house. On the other hand, fewer Boomers are chasing retirement affordability in other destinations—just 35% of Boomers would consider an out-of-state or international move to purchase a home.  

To learn more about how BMO can help customers make real financial progress, visit BMO.com.