How Homeownership Affects American Life and Finances

The American dream of homeownership has long been a symbol of financial stability and success. However, many homeowners today consider themselves "house poor," struggling to make ends meet due to the financial burdens of owning a home. 

In our latest study, we looked into the hidden costs and unexpected challenges many homeowners face, exploring how property ownership impacts American budgets and lifestyles. From skipped bill payments to foregone medical care, this article will examine the sacrifices being made to keep up with mortgages and home-related expenses, and how these pressures are reshaping attitudes toward homeownership.

Key Takeaways

• Nearly 1 in 3 homeowners consider themselves house poor.
• 1 in 8 homeowners put over 50% of their income toward their mortgage.
• 27% of homeowners live paycheck to paycheck due to housing expenses, and 40% rely on side jobs to make ends meet.
• 22% of homeowners have skipped paying other bills to cover home expenses, and more than 1 in 8 (14%) have had to forgo medical care.
• 46% of homeowners can't afford necessary home repairs and upgrades.
• Nearly 1 in 5 homeowners (18%) can't afford groceries after covering home expenses.

The Price of a Home

The cost of homeownership has become a significant financial burden for many Americans. This section explores the extent to which homeowners are struggling with housing expenses and the impact on their overall financial well-being.

Homeownership, often considered a cornerstone of the American Dream, has become a source of financial strain for a substantial portion of the population. Nearly one-third of homeowners considered themselves "house poor," indicating that their housing expenses consume an outsized portion of their income. The situation was particularly dire for some, with 1 in 8 homeowners allocating over 50% of their income toward their mortgage. This was especially common among those who identified as house poor (22%).

The financial squeeze extended beyond mortgage payments. House poor homeowners reported spending an average of 32% of their monthly income on mortgage payments and an additional 14% on utilities. This leaves little room for other essential expenses or savings.

Another 27% of homeowners reported living paycheck to paycheck due to housing expenses, most of whom were those who considered themselves house poor (63%). The younger generations appeared to be hit hardest, with 70% of millennials and 67% of Gen Z struggling to save or invest for the future due to high homeownership costs.

We also noticed pervasive financial setbacks among homeowners. Nearly one-third (32%) felt that buying a house had negatively impacted their financial situation, with over half of house poor individuals (55%) sharing this sentiment. Adding to these concerns, 64% of homeowners reported housing expenses increasing over time, a trend even more pronounced among the self-described house poor (81%).

Sacrificing Stability

Homeownership often comes with hidden costs and unexpected financial challenges. This section reveals the sacrifices and trade-offs many homeowners make to maintain their properties and meet their financial obligations.

The high cost of homeownership has forced many Americans to make difficult choices. Nearly half of homeowners (46%) reported being unable to afford necessary repairs and upgrades to their homes, potentially leading to further deterioration and increased costs in the long run. To cope with these financial pressures, 40% of homeowners have turned to side jobs to make ends meet.

The struggle to keep up with housing expenses has led some homeowners to make even more drastic sacrifices. More than 1 in 5 (22%) have skipped other bill payments to cover home expenses, while 14% reported forgoing medical care. Another 18% found themselves unable to afford groceries after covering their home expenses.

Various other home-related costs contributed to respondents' financial strain as well:

• Increased property taxes (43%)
• Emergency repairs (41%)
• Major home repairs (41%)
• Utility bills (33%)
• Appliance breakdowns and replacements (31%)
• Homeowners insurance premiums (28%)

House Poor and Stressed

Homeownership, long considered a key milestone of financial stability, has become a source of stress and regret for some. This section examines the emotional toll of financial strain on homeowners and its impact on their satisfaction with their decision to buy a home.

The financial pressures of homeownership have led some to question their decision to buy a home: 1 in 16 homeowners expressed a desire to return to renting, citing the financial strain of homeownership as the primary reason. This sentiment was particularly pronounced among younger homeowners, with 1 in 8 Gen Zers and 9% of millennials regretting their home purchase due to the resulting financial burden.

Home Sweet Struggle

For many, the American dream comes at a significant cost. The financial strain of homeownership is forcing individuals and families to make difficult choices, often at the expense of their overall financial health and well-being. As property taxes rise, unexpected repairs emerge, and other home-related expenses accumulate, a growing number of homeowners find themselves trapped in a cycle of financial stress.

As we move forward, it's crucial to find ways to make homeownership more sustainable and less burdensome, ensuring that the pursuit of this dream doesn't come at the cost of financial security, well-being, and peace of mind.

Methodology

For this campaign, we surveyed 1,009 homeowners about their personal experiences, budget constraints, and sacrifices. Among them, 32% identified as "house poor" and 68% as "not house poor." The generational breakdown was as follows:

• Baby boomers (15%)
• Gen X (33%)
• Millennials (48%)
• Gen Z (5%)

The survey was conducted on August 1, 2024. If any percentages don't total exactly 100, it is due to rounding.

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