File photo: “Open House” sign outside his home in Washington, DC, USA on Sunday, November 19, 2023.
Nathan Howard | Bloomberg | Getty Images
When Maryland Governor Wes Moore was eight years old, his mother said he wanted to send him to military school to correct his actions.
However, once he was 13, she finally sent him to a military school in Pennsylvania. He ran five times in the first four days.
“The place really helped me change my life,” Moore said of retirement security. Black Rock Meeting was held in Washington, DC on March 12th.
One obstacle – tuition fees prevented her mother from sending him faster, he said.
Moore was able to attend school thanks to the help of his grandparents who rented the house he bought when he moved to the US to help pay his tuition for his first year.
“They sacrificed some of their American dreams and allowed me to achieve myself,” Moore said.
“That’s what the housing helps to provide,” Moore said. “It’s not just a shelter. It’s security. It’s an investment. There’s a possibility that something can be used in the event of an emergency. Now you may have assets that you can hold and can pass it on to future generations.”
After retirement funds, housing generally represents the second most valuable asset people have, Moore said.
Some people are less likely to own a home than they were in 1980.
However, achieving that homeowner status can feel unattainable for the first time buyer of the future in today’s economy.
About 30% of Maryland’s young residents are thinking of leaving the state due to high housing costs, Moore said.
A 2024 report from the Harvard Housing Research Center found that both tenants and homeowners across the United States are struggling with high housing costs. Number of renters hit by costs – People who spend more than 30% of their income on rent and utility services rose to an all-time high in 2022. At the same time, millions of future home buyers are taking prices at high home prices and interest rates.
Many hopeful first-time home buyers may find it easier for their parents or grandparents to reach homeownership status.
Research shows that these feelings are justified.
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Since 1980, a recent study by the Urban Research Institute found that median home prices have increased much faster than median household income.
Research shows that people in the 35-44 years of age nationwide are in a significant year of home buying – less likely to be homeowners than in 1980.
In that age cohort, homeownership rates fell by more than 10% compared to 45 years ago, the Urban Institute found. Research shows that children today, ages 35 to 44, are also creating homes at a lower rate, so that numbers are likely to be modest.
Jun Zhu, a non-resident of the Urban Research Institute’s Housing Finance Policy Center, said it could ultimately have a lasting impact on his ability to build wealth.
“When you have a home, when the home is grateful, you’ll get home equity,” Zhu said. “Getting home equity is a very important way to actually gain wealth.”
Children ages 35 to 44 in low-income quartiles have seen the biggest decline in homeownership compared to their colleagues. This is partly due to the fact that married people are more likely to be homeowners, while low-income people are less likely to marry.
Education is also a factor in widening the homeownership gap, as education is a small percentage of household leaders with the lowest incomes with university degrees.
Racial disparities in homeownership rates persist
The National Association of Realtors points out racial disparities in terms of housing affordability.
In 2023, the latest available data, Black homeownership rate of 44.7%, was the highest year-on-year increase among racial groups, but was still quite behind the White homeownership rate of 72.4%. Other groups fell during that time, with Asians having a homeownership rate of 63.4% and Hispanics having a homeownership rate of 51%.
Nadia Evangelu, senior economist and director of real estate research at the National Association of Realtors, said that the younger generation, who reached strong wage growth and the age of major home buying, contributed to the rise in black homeownership in 2023.
But black homeownership rates have fallen below 50% over the past decade, Evangelu said. It ultimately limits their ability to grow their net worth and accumulate wealth.
Policy changes will allow Americans to make their first home easier. This includes providing educational opportunities for low-income households, providing down payment assistance by reducing down payment restrictions and other regulatory barriers, according to the Urban Research Institute, and encouraging housing production by reducing zoning restrictions and other regulatory barriers.
