Homeownership for many younger Americans isn’t just a dream. It has become a prominent desire, with many young people making poignant sacrifices to be able to afford a home — someday. While owning a home is a fundamental component of the American Dream, it’s one that may be out of reach for many individuals younger than 40, the median age of first-time homebuyers.
The median age of 40 is a lot higher than it used to be. First-time homebuyers make up only 21% of the housing market, meaning almost four-fifths of home purchases are made by people buying their second, third or fourth home, either as a residence or for investment income purposes. It’s a stark reality that’s the result of “a housing market starved for affordable inventory,” according to Jessica Lautz, vice president of research at the National Association of Realtors.
Younger would-be homeowners are making difficult decisions to forgo many of the traditional milestones that come with young adulthood, including pivotal life moments like getting married and having children. But it goes deeper than that, as many are expressing trepidation at the thought of changing jobs, or even having a pet or living independently, all for the sake of saving up to buy a house. But are these sacrifices reasonable and ultimately worth it?
Dreams Delayed, Lives on Pause
If you’re one of these younger hopeful homeowners, the data is unsettling. A full 71% of would-be homeowners are putting off major life decisions and pivotal milestones in hopes of saving enough to purchase a home. And it’s not just significant delays in things like moving out on their own, getting married and having kids. It also involves things like forgoing pet ownership or staying in an unfulfilling job out of fear that changing positions might jeopardize their hopes of having a home of their own.
The numbers show the sacrifices that people are making in order to save for a house:
- Nearly 1 in 5 would-be homeowners are postponing marriage or having kids until they’re able to afford their own home.
- 17% of would-be homeowners are delaying career changes.
- 15% of would-be homeowners are putting off entrepreneurial dreams like starting their own business.
These sacrifices are even more pronounced for the youngest generation of American adults. Eighty-four percent of Gen Z adults who want to own a home are postponing “at least one major life decision,” and almost one-third say they’re putting off having children until they have a place of their own to raise them. These decisions can have profound generational impacts and shape the lives of those having to sacrifice so much for the hope of owning a home.
What’s likely to happen to a generation or two of Americans who postpone living fuller lives in the hopes of one day being able to afford a home? While spreadsheet logic may dictate a “save now, buy later” mindset, putting off these milestones may have significant and wide-reaching consequences.
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Opportunity Costs and Lost Potential
Arguably the most significant sacrifice being made by younger generations in the name of eventual homeownership is putting off having children. This can lead to parental milestone anxiety, which can have negative and long-term impacts on mental and emotional well-being.
There’s a financial price to pay as well. Delaying having children into your mid-30s or 40s could mean you’ll require fertility treatments just to have a shot at parenthood. Furthermore, a single cycle of in vitro fertilization — which doesn’t guarantee pregnancy — can cost anywhere from $20,000 to $30,000, if paid for out of pocket.
That’s not all. Owning your own home brings with it a sense of stability and security that psychologists call a “control effect.” This empowering sense of agency can serve as a powerful buffer against other adverse life experiences.
Though solutions to the current crisis in housing affordability are murky at best, the takeaway from these findings is clear: Saving for homeownership is a worthwhile goal, but don’t completely stop living your life in the meantime. The ultimate price may be higher than you bargained for.
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This article originally appeared on GOBankingRates.com: 3 Major Milestones People Are Delaying To Prioritize Homebuying
