By Jeff Ostrowski, Bankrate.com
Home prices remain near record highs. Mortgage rates have retreated but remain well above their pandemic lows. Add it up, and homebuyers are feeling discouraged.
With housing affordability squeezing buyers, one in six (16%) of aspiring homebuyers have given up on purchasing a home in the past five years because they could not find anything they liked or could afford, according to a new Bankrate survey. Nearly 3 in 10 (28%) aspiring homeowners said the price of a home in their area was the most important issue when deciding whether to purchase a home. That’s in spite of a broad desire for homeownership — the vast majority of U.S. adults still consider owning a home a linchpin of the American dream, according to Bankrate’s 2025 Home Affordability Survey.
“U.S. home affordability is at its worst level in decades,” says Stephen Kates, financial analyst at Bankrate. “The punishing combination of high home prices, low supply and high mortgage rates has caused one in six home shoppers over the past five years to give up completely.”
Benjamin Clark, broker-owner of Buyer Representation in Salt Lake City, Utah, and president of the National Association of Exclusive Buyer Agents, agrees. “Prices have gone up significantly since Covid,” he says. “Interest rates have gone up significantly since Covid. And buyers’ incomes have not necessarily gone up.” Still, he says, buyers shouldn’t give up — new buying opportunities are opening up as the housing market cools nationallly.
Bankrate’s key findings on homeowner sentiment
Homebuyers are feeling discouraged. Amid affordability challenges — namely record-high home prices and elevated mortgage rates — 16% of people who were looking to buy over the past five years have abandoned their search.
Younger generations believe they have fewer financial opportunities compared to older generations. Gen Z (ages 18-28) leads the way in this feeling, with 54% of Americans in this age group saying older generations had it better.
Many millennial buyers have abandoned their searches. Millennials are the most likely to have given up on purchasing a home in the last five years because they couldn’t find anything they liked or could afford at 22%, followed by Gen Xers at 17%.
A discouraging market: Hopeful buyers pull the plug on their home search
When asked about what the important issues are for determining their interest in buying a home, aspiring homeowners are most likely to point to the cost of homes in the area (28%) followed by the amount in their savings (16%), job situation (16%), an interest in staying in the same area long term (14%) and personal relationships (4%). Among those who are interested in purchasing a home, the cost of homes in the area is the most important factor across generations, genders and income brackets.
Among aspiring homeowners, just 7% are actively shopping for a home — searching for-sale homes in their area or attending open houses. Gen Zers are the most likely to be shopping for a home, with 1 in 10 (9%) doing so, followed by millennials (ages 29-44) at 7%, Gen Xers (ages 45-60) at 7% and baby boomers (ages 61-79) at 5%.
“Despite the difficulty in finding homes to purchase, nearly half of home shoppers report that prioritizing a home purchase in their local area is the most important factor influencing their decision,” Kates says. “For buyers who are struggling but remain committed to finding a house, expanding your search is a necessity. The house you can buy might be a little farther, a little older or a little weirder than you initially wanted, but you can make it your own.”
Buying attitudes by age
Across generations of aspiring homeowners, millennials are the most likely to have given up on purchasing a home in the last five years because they couldn’t find anything they liked or could afford at 22%, followed by Gen Xers at 17%, Gen Zers at 12% and baby boomers, also at 12%.
To gauge attitudes about the sharp rise in home prices — and the decline in affordability — since 2020, we asked: “Compared to previous generations, how would you best describe the financial opportunities available to people of your generation?” A third of total Americans said they have more opportunities to achieve financial goals than previous generations, 28% perceived similar opportunities and 39% believed they have fewer opportunities today.
But there’s nuance within those results. Younger generations believe they have fewer opportunities compared to older generations. Gen Z leads the way in this feeling, with 54% of Americans in this age group saying older generations had it better. Among millennials, 48% say they’re at a disadvantage, followed by 38% of Gen Xers and just 22% of baby boomers.“ Younger Americans are feeling this disadvantage at a time when home ownership is increasingly out of reach
“Gen Z and millennials are in their prime home-shopping years but face a high barrier to entry,” Kates says.
Intriguingly, income only has a minor impact on respondents’ beliefs that they have the same or greater opportunities than prior generations.
Buying attitudes by education
Education levels affect how Americans view homeownership. Among those who never attended college, 13% say they have never owned and have no desire to. That falls to just 9% of Americans who attended some college, 5% of those with four-year degrees and 2% of Americans who attended graduate school.
“Our data shows that education influences homebuying aspirations and views on economic opportunity in surprising ways,” Kates says. “College-educated respondents were more likely to aspire to homeownership but also more likely to believe their generation has fewer opportunities than previous ones. Income level alone did not mirror this result, leading us to conclude that higher education raises lifestyle expectations regardless of income or financial outcomes.”
What you can do on your homebuying journey now
While the current housing market is discouraging, there are ways to cope with the challenges that can come with buying a home. Consider these tactics:
•Understand that the market has changed in buyers’ favor. While frustration has been the rule in recent years, the balance of power has shifted. “Four or five years ago, you had to get an offer in within a day, or you missed your opportunity,” Clark says. “Now, buyers have the opportunity to slow down, see a variety of homes. If you’re in a market where there is excess inventory, buyers do generally have more leverage.”
•Look for down payment assistance: Every U.S. state offers some type of down payment assistance for first-time buyers. While the typical national package is worth $18,000, according to Down Payment Resource, some buyers get much more. In fact, some intrepid buyers are scoring down payment assistance packages worth $100,000 or more.
•Make a smaller down payment: Yes, 20% is the gold standard for down payments, but it’s not required. Federal Housing Administration (FHA) loans let you put down 3.5%. Some conventional loans require just 3%. And eligible service members, veterans and their surviving spouses can put down nothing for Veterans Affairs (VA) loans. The fees are higher for VA and FHA loans compared to conventional mortgages, but they allow millions of buyers to become homeowners.
•Consider a fixer-upper: Formica counters? Outdated bathrooms? Ugly carpets? Homes in need of updates can still offer value if you’re willing to put in a little work. And if the fixes are cosmetic rather than structural, you can make repairs as your finances allow.
•Pull back your expectations and be open to compromise: Smaller homes are usually cheaper than larger homes. So are properties in less desirable neighborhoods. Most buyers compromise on something, and your first house is unlikely to be your dream home, so you might need to scale back some of your hopes in order to become a homeowner.
Methodology
• Bankrate’s 2025 Aspiring Home Buyers Survey was conducted using an online interview administered to members of the YouGov Plc panel of individuals. Total sample size was 2,319 adults. Fieldwork was undertaken Aug. 13-15, 2025. The survey was carried out online. The figures have been weighted and are representative of all U.S. adults (aged 18+).
©2025 Bankrate.com. Distributed by Tribune Content Agency, LLC.