A photograph captured on November 19, 2023, shows an “Open House” sign inviting potential buyers to a property in Washington, DC.
Nathan Howard | Bloomberg | Getty Images
Reflecting on his childhood, Maryland Governor Wes Moore shares the poignant story of his journey to military school, prompted by his mother’s hopes to correct his youthful misbehavior. Although she initially decided on this path when Moore was just 8, financial barriers delayed his enrollment until he turned 13. Despite his initial resistance that even led him to attempt escape five times within the first four days, Moore eventually found the experience transformative. He described the impact at a BlackRock conference in Washington, D.C. on March 12, where he was discussing the intricacies of retirement security.
Financial constraints nearly kept Moore from attending the school earlier, but his grandparents stepped in, leveraging the equity in their home—a home they purchased after immigrating to the U.S.—to cover the first-year tuition. Their generosity, Moore pointed out, represents the deeper value of homeownership beyond just providing shelter. It embodies security, a long-term investment, and a potential financial lifeline during emergencies. Housing, he noted, stands as the second largest asset for most families after retirement savings.
However, today’s economic climate presents substantial challenges to homeownership, especially for first-time buyers. In Maryland, about 30% of young adults are considering moving out due to the steep housing costs. This sentiment is reflected nationwide, where both owners and renters face financial strain. Harvard University’s Joint Center for Housing Studies in its 2024 report highlights a record high in cost-burdened renters—those spending over 30% of their income on housing. Meanwhile, lofty prices and rising interest rates have sidelined many prospective buyers.
The generational contrast is stark; while millennials often feel their predecessors had an easier path to homeownership, data supports this notion. Research from the Urban Institute indicates that since 1980, home prices have climbed significantly faster than incomes. Moreover, today’s 35 to 44-year-olds hold lower homeownership rates compared to peers in 1980, underscoring financial hurdles that have grown over decades.
Urban Institute’s non-resident fellow Jun Zhu emphasizes the critical wealth-building role of homeownership. As housing values increase, so does the opportunity to gain equity—a key aspect of accumulating wealth. Unfortunately, those in lower income brackets within the 35 to 44 age group have experienced the steepest declines in homeownership, fueled partly by factors such as marital status and educational attainment disparities.
Moreover, racial disparities in homeownership persist. Recent findings from the National Association of Realtors reveal a wider gap, with Black homeownership at just 44.7% in 2023, despite being the group with the most significant year-over-year increase. This lags behind the rates of other groups such as whites at 72.4%, Asians at 63.4%, and Hispanics at 51%. While rising wages and more young Black individuals entering the homebuying market have driven these numbers up, the rate remains below 50%, limiting wealth-building potential.
Experts suggest policy changes could facilitate homeownership for Americans. Propositions include providing educational opportunities to low-income households, assisting with down payments, and easing regulatory hurdles to encourage housing production. As discussions continue, these changes could pave the way for broader access to the long-standing American dream of homeownership.
