High Housing Prices Force Pennsylvania Couple to Live with Parents

Young Americans are struggling to afford the cost of buying their first home, and for many, it means a near permanent stay with their parents in adulthood.

Mortgage rates hit their highest level in two decades this past October, with home affordability remaining at its lowest level for more than 10 years, the National Association of Home Builders said this month.

And with interest rates set around 8 percent in the fall, property prices are becoming increasingly out of reach for the average American in their 20s and 30s.

Liz Caples, a 28-year-old college graduate in Pennsylvania, has been saving for a home with her partner for the past two years. But the prices are prohibitive, and they are no longer certain their homebuying dreams will ever become a reality.

"Houses in my area that originally sold for $150-$200,000 are now well over $350-$400,000," Caples told Newsweek. "We want some land with our home, but most houses have less than an acre of land included, even with the high prices. If a property comes with more than 1 acre, it is almost guaranteed it's going to cost over $400,000."

Caples said today they struggle to even afford a trailer, meaning both she and her 26-year-old partner still live at home with their parents.

They aren't alone in this predicament either. Nearly one in three Gen Z adults live with their parents because they can't afford their own place, a recent Intuit Credit Karma poll found.

Inflation brought home prices to a record high after the pandemic, so Americans across the country are struggling to purchase even a modest home with their post-college salaries.

For Caples, her personal struggle became even more dire in 2020 when she lost every cent of her savings, she said. At the time, Caples had a seizure that led her to crash her car and go into cardiac arrest.

"I was diagnosed with a rare, life-threatening heart problem and had to have surgery," Caples said. "I couldn't work for months, but did not qualify for disability. Since the accident, my car insurance has skyrocketed, despite it being a medical issue, and I am drowning in debt from a car loan and student loans."

Caples is not the only one feeling the housing market is set up against young adults, experts say.

"The odds are incredibly stacked against younger homebuyers now," Pete Evering, the business development manager at Utopia Management in San Diego, told Newsweek. "Millennials and Gen Zs are forced to live with their parents longer because of these immense economic pressures."

While there are still some young buyers in the market, they represent the exception, rather than the rule, for millennials and Gen Z, Evering said.

Realistically, there might not be a light at the end of the housing market tunnel either.

"I don't see any long-term fix for this situation," Evering said. "In the short term, an increased focus on new construction can ease the inventory shortage, which in turn may lead to slightly lowering home prices or at least slowing down price increases, allowing some younger would-be-buyers to exploit a window of opportunity."

The National Association of Home Builders said in a recent report that affordability should slightly improve this year, as mortgage rates peaked in the fourth quarter of 2023 and are now at around 7 percent.

Still, construction costs continue to frustrate homebuyers, and prices are also climbing due to a worker shortage within the sector.

In part due to this, the younger generations will likely continue to seek out unorthodox living situations, whether by staying with their parents, creating mini-apartments or mini-homes or even using sleeping pods, Evering said.

These options, while not the American dream of home ownership once sold to the younger generation, allow residents increased flexibility and mobility as well.

"The number one thing we see in people in their 20s and 30s is they want to be mobile," Bruce McNeilage, the CEO and co-founder of Kinloch Partners, told Newsweek.

McNeilage owns rental homes throughout the South and said the younger generation, whether out of necessity or desire, is skipping out on the idea of home ownership altogether.

"They don't want to be tied down to a house and making payments," McNeilage said. "They would rather rent."