2024 Aspiring Homeowners Report

The This Old House research team surveyed 3,000 aspiring homeowners to learn whether they believe homeownership is within reach and their biggest homeownership barriers.

Key Findings

• 1 in 5 aspiring homeowners failed their attempts to purchase in 2023, but most plan to try again in 2024.
• 29% of aspiring homeowners have plans to pursue homeownership in 2024 despite nearly half who believe they’ll likely have to put their plans on hold.
• 92% of aspiring 2024 homeowners say they’re willing to compromise or change their plans, including 58% who would increase their budget and 23% who would offer above asking price.
• More than half (57%) of aspiring homeowners with no 2024 purchase plans say that home prices are their biggest obstacle, followed by the expense of a down payment (48%) and mortgage rates (34%).
• Most are optimistic about the 2024 market despite citing costs as their biggest obstacles.
• The best city for aspiring homeowners looking to achieve the American Dream is Provo, Utah, where market conditions such as price per square foot and homeowners insurance are favorable for first-time buyers.

1 in 5 Aspiring Homeowners Failed in Their Attempts To Purchase in 2023—Most Plan to Try Again in 2024

Our survey indicated that while one in five aspiring homeowners couldn’t follow through with a home purchase in 2023, most plan to keep trying. Seventy-two percent of unsuccessful buyers still have plans to purchase a home in 2024. So, what were the reasons would-be buyers were unsuccessful in 2023?

Costs were a significant deterrent. A full 65% stated that home prices were currently too high for them to purchase a home. Another 54% cited high mortgage rates as the reason. Other related costs that prevented people from buying included moving costs (36%) and the high price of a down payment (35%).

Affordability Is the Biggest Obstacle for Aspiring Homeowners Who Are Not Pursuing Homeownership in 2024

A full 85% of non-homeowners still hope to pursue the American Dream at some point, but what about the remaining 15% who don’t feel homeownership is in their future?

Nearly half (47%) of those who don’t plan to buy a home in the future say it’s because they don’t think they’ll ever be able to afford it. Considering the median home price across the United States was $431,000 for the third quarter of 2023 and median household income hovers around $75,000, it’s no surprise that many people find affordability the biggest barrier to homeownership. Even 57% of those who hope to buy one day say that home prices are their biggest obstacle, followed by the expense of a down payment (48%) and current mortgage rates (34%).

Interestingly, 13% of aspiring homebuyers are waiting to see how the 2024 presidential election will impact the economy. Nearly one-third (32%) of those not planning a purchase in 2024 believe a Donald Trump presidency would be most beneficial to the market, while 24% believe a second Joe Biden term would have the most positive impact.

77% of Potential 2024 Homebuyers Believe Housing Inventory Will Increase, but Just Half Believe the Market Will Cool

A majority of aspiring buyers are optimistic about the housing market. Fifty-one percent of those who plan to buy in 2024 are hopeful home prices will decrease. Seventy-seven percent think inventory will increase in 2024.
Affordability remains a major concern despite this optimism. Seventy-six percent of prospective homeowners plan to use a down payment program, but they may not have a mortgage secured. Only 42% of potential 2024 buyers are preapproved for a mortgage.

9 in 10 Aspiring Homeowners Are Willing To Compromise or Change Their Plans if It Means Achieving Homeownership in 2024

Buyers feel increasingly desperate despite their optimism about favorable 2024 housing conditions. A full 92% of aspiring homeowners are ready to change their strategies for securing a property. 

Fifty-eight percent of these potential 2024 buyers willing to compromise said they would increase their budget if necessary, with nearly a quarter (23%) saying they would offer above the asking price. This desperation also extends to mortgage rates: 30% would settle for a mortgage rate higher than 6% if it meant they could finally purchase a home.

Other prospective buyers are planning to make adjustments to their housing plans. Settling for less square footage would be acceptable to 43% of potential 2024 buyers, while 50% are willing to move to different areas than originally planned. Thirty-one percent looking to secure funding would be willing to ask family members for money, while 30% are willing to speed up their time line if it means buying as soon as possible.

Sacrificing on Style

Not only are aspiring 2024 homeowners willing to compromise on time line and budget, but most know they may need to compromise on other aspects of their dream home. Most potential buyers (71%) are looking for a single-family home, including 34% who would have their hearts and wallets set on a new construction home and 28% who would prefer to purchase something renovated.

However, 55% of buyers who would prefer a new construction home say they’d settle for something else, including 31% who would buy a renovated home and 26% who would buy a townhome. Fifty-four percent of those who would prefer a renovated home said they would be willing to pivot their plans, including 41% who would settle for a fixer-upper, single-family home if they had to.

The Best Cities for Aspiring Homeowners

The mantra for 2024 homebuyers regarding affordability might be: location, location, location. Our team ranked 148 cities in the United States based on affordability, home prices, down payments, and mortgage rates. We also examined the housing market’s inventory and whether homes sell quickly.

Provo, Utah, ranked No. 1 for aspiring homeowners. We found its median annual homeowners insurance premium was $1,194, and there was a 10% decrease in the price per square foot of homes over the past six months. Provo also boasts a median down payment of $35,317. This is 69% less expensive than a $112,400 down payment in San Francisco, California—the least friendly city on our list for aspiring buyers. A down payment in San Francisco will cost homebuyers over $112,000.

Full Data

Tips for Pursuing Homeownership in 2024

There are many ways to set yourself up for success if you hope to pursue homeownership in 2024.

• Find a budget-friendly location: Many costs contribute to homeownership, but researching property taxes in the area, putting down more money up-front, and looking for Federal Housing Administration loans could help you avoid more expenses down the road.
• Secure a mortgage preapproval: Securing a preapproval from a lender early in your buying journey allows you to move faster and make more informed offers on homes you’re interested in.
• Protect yourself from the unexpected: Shop for homeowners insurance and home warranty policies that work best for your budget.
• Make a moving budget: Compare rates across multiple moving companies and use quote calculators to avoid surprises on your moving bill. Consider moving during off-season months to potentially save thousands.
• Leverage first-time homebuyer programs: Getting approved for a mortgage and saving up for a down payment can be overwhelming. Fortunately, first-time homebuyer programs can make the process a little less stressful.

Expert Tips and Insights

We turned to a panel of experts to learn about their observations of the housing market and what aspiring homeowners can anticipate this year. Read their tips and insights below.

Rebel Cole, Ph.D.

Professor of Finance

College of Business of Florida Atlantic University

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What tips or suggestions do you have for homeowners who are still trying to navigate the housing market in 2024?

Interest rates are falling and are likely to continue to do so. If you can wait, then wait. If you can’t wait but need financing, go with an adjustable rate mortgage, which is much cheaper than a fixed rate mortgage, and then plan to refinance in 12-24 months.

What are some things people should consider when looking for a home in a specific city? 

There are three things that matter in real estate: location, location and location. Find the location that best fits the needs of your family.

Affordability is one of the biggest obstacles for homebuyers in 2024. What financial advice could you provide for aspiring homeowners? 

Prices are not likely to fall much in the coming year because there is very limited supply but strong demand, in spite of high prices and high mortgage rates. If you can wait until 2025, mortgage rates should be much lower. If you can’t wait and need financing, go with an adjustable rate mortgage, which is much cheaper than a fixed-rate mortgage, and then plan to refinance in 12-24 months.

Dr. Cole is the Lynn Eminent Scholar Chaired Professor of Finance in the College of Business at Florida Atlantic University in Boca Raton, FL. Previously, he has taught at DePaul University in Chicago, the University of New South Wales in Sydney, Australia and the University of Auckland in New Zealand. He received his PhD in Business Administration from the University of North Carolina in 1988, after which he spent ten years working as a financial economist in the Federal Reserve System. Dr. Cole is a special advisor to the Asian Development Bank, the International Monetary Fund, the World Bank and other non-governmental organizations, providing training and technical assistance to central banks around the world in more than 60 countries.  Dr. Cole has published peer-reviewed articles in many top academic finance journals, and his research has been featured in the Financial Times, the New York Times and the Wall Street Journal. His primary areas of research are corporate governance, entrepreneurship, financial institutions, and real estate.

Ying Huang Johnson, Ph.D., MS, MCRP

Associate Professor in Finance & Real Estate

University of South Alabama

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What tips or suggestions do you have for homeowners who are still trying to navigate the housing market in 2024?

I think the inflation will not go down further, housing prices might stay high. Even though the Fed pivoted last month and said they are going to cut rates. But, interest rates will not drop drastically unless we are in a recession. I probably would observe how much the interest will be and decide because what dwarfs most buyers is the high mortgage rate, currently, almost 8% on average.

What are some things people should consider when looking for a home in a specific city?

I would be looking at smaller houses within the target neighborhood. The reason is that smaller houses are cheaper than other houses in the neighborhood while it will appreciate as much as other houses. Moreover, smaller sized houses in a neighborhood go fast when it is time to sell.

Affordability is the one of the biggest obstacles for homebuyers in 2024. What financial advice could you provide for aspiring homeowners?

Given high mortgage rates, I would stay in budget and do a fixed rate mortgage. Probably a 30-year fixed mortgage. In the years before 2020, I would recommend using a 15-year fixed mortgage to pay less total interest and shorter time to pay off compared to a 30-year fixed rate mortgage. However, in the current mortgage market, a 30-year fixed rate might work better because the monthly payment is lower relative to a 15-year fixed rate mortgage. Then, when the rates go down later, homeowners can refinance.

The focus on Dr. Johnson’s research and consulting work is on the subjects of corporate finance, microstructure research, and real estate.  In addition, she has expertise in school evaluation and GIS applications in real estate research. She has received numerous research grants and two best paper awards. Dr. Johnson has authored (or co-authored) many articles in journals and conference proceedings in the finance literature.  In addition, she has received a number of awards from American Real Estate Society (ARES).

Melanie Jewkes

Extension Professor in Family & Consumer Sciences

Utah State University

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What tips or suggestions do you have for homeowners who are still trying to navigate the housing market in 2024?

Take a homebuyer course, especially if you are a first time home buyer. Look for courses that are HUD-approved that meet standards protecting consumers. One such course is the Utah State University Extension online Homebuyer course that is HUD- and USDA rural housing approved. It also qualifies as an approved course for any HUD or USDA rural housing homebuyer programs that assist with downpayment or closing costs.

Consider your lifestyle. Your lifestyle will help you identify the type of house that you should purchase. Consider writing a wants/needs list. Navigating the market knowing what you can and cannot live without will help narrow the search.  

It’s okay to wait it out. Living the American dream of owning a home may not be feasible to your pocket this year. Buying a home may enhance your life but could cause stress to your finances. If you don’t buy a home this year it doesn’t mean you won’t ever be a homeowner.  While you wait, work on decreasing your debt-to-income ratio and building savings for closing costs and downpayment.

What are some things people should consider when looking for a home in a specific city? 

Choosing a great Realtor.  A Realtor is much more than a professional who organizes the transaction between the buyer and the seller. They search for a home that meets your needs within your price range in a desired area. Seek referrals from friends and family members that know of agents who know the area you hope to buy in.  

Look for grants and home buyer assistance from the city, county or state level governments. Often, there are programs that provide help with down payment or closing costs to qualified households.  

Affordability is one of the biggest obstacles for homebuyers in 2024. What financial advice could you provide for aspiring homeowners? 

Work with your spending plan to determine what mortgage payment you can afford. Remember that a mortgage payment is not only principal and interest on the mortgage loan – it will also include escrow for homeowners insurance and property taxes, and could even include private mortgage insurance if you don’t have a 20 percent down payment on the mortgage. 

Melanie D. Jewkes is an Extension Professor with Utah State University, based in Salt Lake County. She earned both a bachelor’s and master’s degree in Family Finance. With 16 years’ experience in community educational programs, she oversees programs in family finance, nutrition and food preservation. She directs the USU Extension HUD and USDA Rural Housing approved online homebuyer education course and the free PowerPay debt elimination program. Find more information at finance.usu.edu.

Methodology

The research team at This Old House Reviews surveyed 3,000 non-homeowners in the U.S. to determine their aspirations for homeownership, whether they plan to pursue homeownership in 2024, and what barriers to homeownership they currently face. The survey was administered December 9 and 10, 2023, with a 2% margin of error.

We ranked 148 cities across the following metrics to determine the best cities for aspiring homeowners:

• Percentage of owner-occupied housing units with householder aged 25–44
• Percentage change in median sale price from May to October 2023
• Percentage change in median price per square foot from May to October 2023
• Median down payment
• Median annual home insurance premium
• Percentage change in days on market for homes from May to October 2023
• Median annual real estate taxes paid
• Sharecare’s Community Well-Being Index
• Violent crime rate per 1,000 residents

Sources: U.S. Census 2022 American Community Survey, Environmental Protection Agency, Redfin.com, Quadrant, Sharecare, NeighborhoodScout, etc.

We’ve excluded cities for which comprehensive data was not available.

Questions about our study? Please contact the author here.

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