B
uying a first home is a significant milestone for young adults, symbolizing independence and financial stability. However, in the US, many are finding it increasingly difficult to enter the housing market.
According to the National Association of Home Builders, only 36.4% of Americans under 35 own their homes. Massachusetts stands out as the least affordable state, with a median listing price of $797,000 and a required annual income of around $210,000 to afford it. Affordability challenges in Massachusetts have worsened over time due to strong demand from people moving to the Boston area for education and career opportunities.
Real estate experts point to several factors contributing to low homeownership rates among young adults. The presence of many colleges and universities drives up apartment rents, while high-paying jobs attract employers and drive up housing costs. As a result, those who can afford to stay in Boston often remain in apartments longer than elsewhere, while others are priced out and take employment elsewhere.
For first-time buyers, the realities of these disparities are clear. Jamie Iwanicki and his wife had to settle for a home an hour away from his office due to being priced out of towns closer to his job. Harrison Ford, who works at MIT, can't afford a home in his hometown and rents a small studio.
To navigate these obstacles, flexibility is essential. Some buyers are broadening their search radius or adjusting expectations by looking at smaller homes or shared ownership arrangements. The challenge isn't unique to Massachusetts; states like California, New York, and Hawaii also have low rates of young-adult homeownership due to high property values.
National housing data shows that the median list price has risen 37% since June 2019, while the price per square foot has increased nearly 52%. However, recent stabilization in prices might provide some relief. Despite the challenges, opportunities remain for young buyers who plan carefully and act strategically. Towns that combine job opportunities with affordability tend to see stronger young adult homeownership rates.
