Rising home prices make homeownership inaccessible for young adults

[UNITED STATES] In recent years, homeownership has become an increasingly elusive goal for many young adults in the United States, especially in states like Maryland. With rising home prices, limited inventory, and an economic landscape shaped by inflation, fewer young people are able to capitalize on homeownership as a key investment opportunity. Maryland’s Governor, Wes Moore, recently highlighted the growing challenge, stating that homeownership remains “an investment,” but the high costs of homes today make it a difficult aspiration for many.

The Growing Divide: Homeownership and Younger Generations

For decades, owning a home has been one of the primary ways Americans build wealth. It is often seen as a milestone in adulthood, a marker of financial stability, and an investment in one’s future. However, today’s young adults face a starkly different reality when it comes to homeownership. In 2025, millennials and Gen Zers are confronted with steep competition in the housing market, escalating mortgage rates, and the growing financial burden of student debt. These factors have dramatically decreased the number of young adults able to invest in homeownership, fundamentally shifting the narrative around the American Dream.

Governor Moore’s remarks underscore a broader economic issue facing young people today. As home prices surge to record highs in many areas, including the state of Maryland, first-time buyers find themselves priced out of the market. According to Moore, homeownership is more than just a place to live; it is an essential part of personal financial growth. However, the current price surge is deterring many from achieving this goal. In the face of high demand and limited supply, homeownership for young adults seems more like a distant dream than an achievable investment.

Home Prices Soar: A Barrier to Entry

A key factor driving this issue is the rapid increase in home prices. Over the last decade, home values have increased substantially, particularly in suburban and urban markets. The median price of homes in many regions, including areas surrounding Baltimore and Washington, D.C., has skyrocketed, often exceeding $400,000 and sometimes even higher. The result is that fewer young adults have the financial means to purchase a home, especially when they are burdened by student loan debt or low-paying entry-level jobs.

This trend is evident in the statistics. According to recent reports, the number of millennials and Gen Zers purchasing homes has significantly declined. In 2019, the homeownership rate for Americans aged 25 to 34 was about 45%. By 2025, that number had decreased to under 40%. The inability to afford down payments, coupled with higher interest rates, has made it increasingly difficult for young adults to enter the market.

Moreover, mortgage rates have also risen in recent years, further exacerbating the situation. The average 30-year fixed mortgage rate climbed from 3% in 2020 to over 7% in 2025. While these rates are still historically low, they significantly impact young buyers who may not have the financial cushion to handle the higher monthly payments. As Moore states, the high costs associated with homeownership are keeping many from even considering buying a property.

The Impact of Student Loan Debt

Another contributing factor to the challenge young adults face in purchasing homes is student loan debt. According to the Federal Reserve, student loan debt in the United States has surpassed $1.7 trillion, with many young adults carrying the weight of these loans into their late 20s and early 30s. This debt often prevents them from saving for a down payment or qualifying for a mortgage.

While student loan relief initiatives have made strides, the burden of debt is still very much present. A large number of college graduates are starting their adult lives with significant financial obligations that prevent them from building wealth through investments like homeownership. Even for those who manage to secure a steady income, the weight of monthly student loan payments makes saving for a house an unattainable goal.

Governor Moore has highlighted that addressing the affordability crisis is essential for ensuring that future generations can still consider homeownership as a viable option. “The dream of owning a home is still very much a reality for many—but for far too many, it is slipping away,” he noted in a statement. “The challenge is not just about finding a home; it’s about finding a home that is within reach financially.”

Renters vs. Homeowners: The Wealth Gap

One of the most significant impacts of the current housing market is the widening wealth gap between renters and homeowners. Homeownership has traditionally been one of the most effective ways to build wealth over time, as property values tend to increase with inflation. Renters, on the other hand, are not able to capitalize on this appreciation in property values, making it more difficult for them to build financial security.

For younger generations who are unable to afford a home, renting becomes their primary option. However, as rents also rise alongside home prices, renters face a similar issue of affordability. In many areas, rents are climbing at rates that outpace wage growth, making it even harder for renters to save for a down payment or move closer to homeownership.

In Maryland, for example, rental prices have risen by more than 10% over the past five years, putting further strain on young adults who are trying to save for a future home. With high rents and few affordable housing options, many younger individuals are feeling trapped in an endless cycle of renting.

State and Federal Solutions: What’s Being Done?

To address this growing issue, both state and federal governments are beginning to take action. Governor Moore has indicated that the state of Maryland is working on various initiatives to make homeownership more attainable for young people. These include affordable housing programs, down payment assistance, and efforts to increase the availability of homes for first-time buyers.

Additionally, some federal policies aim to provide relief for young homebuyers. For example, there are loan programs that offer lower down payments for first-time buyers, as well as grants and incentives for individuals pursuing homeownership. However, these programs are not always accessible to those with lower incomes or less-than-perfect credit scores, and they often require a considerable amount of paperwork and bureaucracy.

Despite these efforts, Moore acknowledges that these solutions are temporary fixes in a much larger issue. To create lasting change, the housing market will need to shift in a way that prioritizes affordability and ensures that all Americans, regardless of age, can access homeownership.

The Future of Homeownership for Young Adults

Looking forward, it’s clear that the landscape of homeownership is changing. While it remains an essential tool for building wealth, many young adults will need to explore alternative methods to invest in their futures. For some, this may mean renting for a longer period or investing in other forms of assets, such as stocks or retirement accounts. However, there is hope that the housing market will eventually stabilize, and homeownership will once again become a feasible investment for younger generations.

As Governor Moore suggests, it’s not just about owning a home but ensuring that this opportunity remains available to all. “Homeownership is still a critical piece of the puzzle,” Moore said. “It’s a pathway to financial independence and a key to wealth-building for future generations.”

In the years to come, policymakers, developers, and community leaders will need to collaborate to create a more accessible housing market, one where young adults can once again see homeownership as a realistic investment for their future.

While homeownership remains a powerful form of investment, the reality for young adults in 2025 is that rising prices and financial obstacles are making it harder than ever to break into the housing market. As Maryland’s Governor Moore has pointed out, there is a pressing need for reform and innovation to make homeownership an achievable goal for all. Only through concerted efforts to address affordability and offer financial assistance can we hope to see future generations enjoy the benefits of investing in homeownership.