Homeownership has become a more elusive goal for many Americans, particularly those in their 30s, not just because of rising mortgage rates and home prices. Millions of renters are spending so much each month on housing that saving for a down payment and investing can seem impossible.
New Federal Reserve data shows that among households headed by people in their 30s, homeowners saw their median net worth rise 31 percent between 2022 and 2025. Over the same time period, non-homeowners experienced a 32 percent decline.
An uphill battle
Rising property values and the building of equity through mortgage payments are often cited as reasons homeowners tend to create more net worth than renters. But that’s not the whole story.
Whitney Airgood-Obrycki, a senior research associate at Harvard University’s Joint Center for Housing Studies, said the gap also reflects how financial cushions that helped renters earlier in the decade have disappeared.
Pandemic-era financial assistance probably boosted renters’ savings heading into 2022, but Airgood-Obrycki said much of that money had probably been spent by 2025.
This meant that renter households, particularly those with lower incomes, had less money available for savings and retirement. Airgood-Obrycki pointed to data from the Federal Reserve’s Survey of Consumer Finances, noting that “certificates of deposit increased rapidly for renters from 2019-2022 then fell precipitously from 2022-2025.”
And Jung Hyun Choi, a principal research associate at the Urban Institute’s Housing Finance Policy Center, said that many home buyers in their 30s have another financial advantage: They were already better off than the average renter before buying.
How younger buyers save
Choi noted that some younger buyers accumulated more savings by living with their parents and “delaying household formation,” while others reduced their expenses by sharing housing.
Many younger buyers are now partnering with parents or other adult relatives to put up increasingly large down payments or even make cash offers, Choi said. Those advantages have become particularly important as higher mortgage rates, which now stand at 7.4 percent, have made homeownership more expensive.
Building a cushion as a renter
One of the reasons renters struggle to get ahead is that renters face their own unaffordability crisis. Harvard University’s Joint Center for Housing Studies reported in March that 49 percent of renter households spend more than 30 percent of income on rent and utilities. More than 12 million spend more than half their income on housing alone, the analysis found.
The federal Family Self-Sufficiency Program helps eligible households receiving assistance from the Housing and Urban Development Department increase their earnings and build savings. It also connects participants with employment and other support services.
When participants’ income rises, their required rent contribution also increases. But higher rental payments accrue to an interest-bearing escrow account, amounting to a type of forced savings.
HUD gives an example of how a participant whose annual earnings rise from $6,000 to $15,000 could see their monthly rent contribution increase from $150 to $375. The additional $225 the participant pays would be directed to the escrow account. In this scenario, the balance would be $2,700 after one year.
If participants successfully complete the program by having suitable employment, being off welfare and meeting some other requirements, they can receive the accumulated funds.
Eligible households can ask their local public housing agencies whether they offer the program.
Renters can also tap state and local benefits. California, for example, offers a nonrefundable renter’s tax credit of $60 for qualifying single filers and $120 for qualifying joint filers.
Households hoping to buy may also investigate down-payment assistance programs. But taking on significant debt to buy a home, with all of its additional financial obligations, isn’t always the best immediate goal for someone already struggling to cover rent.
For renters struggling to make ends meet, the immediate priority may be building financial stability, rather than expanding their net worth. Renters can’t change the structural advantages of homeownership, and there’s no magic bullet to compensate for high rents. But small steps can add up over time, giving more Americans the opportunity to buy their own home.
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