Remember when buying a home was the American Dream? Yeah… about that. With mortgage rates stuck at 6.63% and the average home price pushing $396,900, homeownership feels less like a dream and more like a VIP club with a cover charge no one can afford. A recent study found that over half of non-homeowners—especially Millennials—don’t think they’ll ever buy a home. And honestly, who can save for a down payment when rent keeps climbing, too?
But let’s not forget—it’s not just mortgage rates pricing people out; construction costs are making it even worse. The price to build a home has skyrocketed, with lot prices tripling in some areas and construction costs rising by over 9% per year. Locally, in just four years, the cost to build a 4,200 sq. ft. home increased by $56.72 per square foot, explains Nathan Knause of Elevation Homebuilders. Add in the fact that new home construction just dropped 10% nationwide, and the supply gap is only growing. Fewer homes being built means prices stay high, affordability stays low, and buyers are left scrambling.
PHOTO: Builder Nathan Knause of Elevation Homebuilders explains in a post on his LinkedIn page the cost increase of land went up 263% the average price-per-square-foot of the same floor plan increased +$56.72/sq. ft. on the two projects pictured above constructed 2019 and 2023, respectively. The cost to build has skyrocketed, making new construction significantly more expensive for builders and buyers alike.
And renting? That’s not much better. Nationally, asking rents just jumped for the first time in six months, with many cities seeing double-digit increases. In 2024 alone, renters in some major metros saw prices surge by 7% or more. And with new apartment construction slowing down, landlords are back in control, pushing rents even higher. So here we are: rent is too high, houses are too expensive, and we’re all just refreshing Zillow listings for fun.
What do you think—homeownership still the goal, or is renting the new reality? Or are we destined to be like Germany which is flipped from the United States with 60% renting and just 40% owning.
[Read More at Wall Street Journal]
[Read Nathan Knause's LinkedIn Post]
