Redfin Survey

Half of U.S. Homeowners and Renters Struggle to Afford Their Housing Payments - Seite 2

Most millennials are not retired, but housing affordability has become so strained that some are resorting to outside-the-box strategies to cover expenses. Millennials are the largest adult generation, and many are aging into their homebuying years at a time when home prices and mortgage rates are high.

The income needed to afford a starter home is up 8% from a year ago, prompting some young buyers to use family money to cover their down payment.

Baby boomers who struggle to afford housing were most likely to dip into retirement funds, with over one-quarter (27.5%) saying they did so to cover housing expenses. That makes sense, as many baby boomers are already retired, and it’s common for retirees to put their retirement savings toward housing.

Roughly 1 in 6 (15.5%) Gen Xers who struggle to afford housing dipped into retirement savings to afford monthly housing costs. The share was lowest among Gen Z respondents (6.5%), many of whom don’t yet have retirement savings.

The IRS typically taxes people who make withdrawals from their retirement accounts before the age of 59.5, but makes an exception for qualified first-time homebuyers, who are allowed to borrow up to $10,000 tax free.

Broken down by race/ethnicity, white respondents who struggle to afford housing were most likely (20.7%) to use retirement savings to cover housing costs, followed by Asian/Pacific Islander respondents (14%), Hispanic/LatinX respondents (13.6%) and Black respondents (12.6%).

Black Respondents Most Likely Work Extra Hours to Afford Housing; Gen Zers Most Likely to Sell Belongings

While pressing pause on vacations was the most common sacrifice for respondents as a whole, it wasn’t the top answer choice for every demographic. People of color and younger generations often made more serious sacrifices.

For example, Black respondents who struggle to afford housing were most likely to say they worked extra hours (25.9%) to cover their monthly costs, while Hispanic respondents were most likely to say that they sold belongings (28.2%). Skipping vacations was the most common answer among Asian/Pacific Islander respondents (43.8%) and white respondents (39.6%).

Black millennials are half as likely to own homes as white millennials, according to a separate Redfin analysis, though the racial homeownership gap exists across every generation due to decades of racist policies and discrimination.

When it came to age groups, skipping vacations was the top choice for baby boomers (42.8%), Gen Xers (36.8%) and millennials (31.3%) who struggle to afford housing. But for Gen Zers, the most common sacrifices were working extra hours, selling belongings and skipping meals, all of which clocked in at roughly 27%.