T
he American Dream of homeownership is becoming increasingly elusive for many. With median house prices at $420,400 and mortgage rates soaring, the financial burden of owning a home has become too great for some to bear. According to Branden Lombardi, President of BB Living, renting is now a more appealing option than buying due to the stress and commitment of homeownership.
Options like build-to-rent communities offer luxury homes without the hassle of ownership. Families, seniors, and young professionals are choosing this route, seeking the benefits of single-family homes without the financial strain. Mortgage rates, insurance costs, and maintenance worries are all contributing factors.
Real estate expert Kevin Leibowitz notes that natural disasters have driven up insurance rates in areas like California and Florida, making homeownership even more unaffordable. "Insurance is getting more expensive," he says. "Big states like California, Florida, and North Carolina are seeing large increases due to natural disasters." This has led to a decline in existing home and new home sales.
Andrew Fortune, Realtor & Brokerage Owner at Great Colorado Homes, observes that young people are becoming accustomed to renting, making homeownership less common. In many places, it now costs less per month to rent than to buy, making it unfeasible for first-time buyers.
As a result, some Americans are turning to alternative housing options like granny flats, in-law suites, and tiny homes. Developer Paul Dashevsky's company, MaxableSpace, is leading the construction of these additional dwelling units (ADUs), which have become popular among Millennial and Gen Z families who can't afford traditional homeownership.
ADUs offer a way for parents to provide a comfortable home for their adult children and grandchildren while also adding value to their property. Many recent graduates are taking advantage of ADUs as a cost-effective option, allowing them to save money without paying rent. While some experts warn that ADUs may drive down single-family home prices, they remain a booming trend in the US housing market.
