Unaffordable Housing Impacts How Americans Consume, Work and Invest
As housing prices climb out of reach, discouraged Americans may be reaching for crypto and other risky investments.
Homeownership in the US offers stability and a path to building credit and equity. That’s why it’s still a central part of the American dream. But as US home prices outpace wages, that dream has become increasingly unattainable. In a 2022 survey of millennials, rental marketplace Apartment List found the share of respondents who expect to rent forever had nearly doubled to almost 25%, from 13% in 2018. A Harris Poll from 2024 found that 42% of all US adults and nearly half of Gen Z agreed with the statement “No matter how hard I work, I will never be able to afford a home I really love.”
As economists, we wanted to know how fading hopes of homeownership stand to shape the lives of younger generations in the decades to come. Buying a home is one of the biggest investments most people ever make, requiring them to sock away money for years before expending a large portion of their savings. We found that as individuals’ perceived likelihood of homeownership diminishes, they systematically shift their behavior: They consume more relative to their wealth, stop working as hard and choose riskier investments such as cryptocurrencies.