Young Americans are skipping rent altogether by living with their parents until they can save up for a down payment.

Even with low mortgage rates and a strong economy, many first-time homebuyers are opting to live a “basement-to-own” existence due to lack of affordability, National Association of Realtors Chief Economist Lawrence Yun said during the trade organization’s annual conference, the Realtors Conference & Expo, on Friday afternoon.

An average home in the United States currently commands $279,500 and requires an income of at least $49,584 to save up for a down payment.

Lawrence Yun

Despite modest increases in affordability between the second and third quarters, more than 30 percent of first-time homebuyers relied on help from family or friends for their down payment., Yun said.

Another strategy some have embraced is cutting out rent altogether by living with parents, often in basements or detached portions of a home.

While this can help some young people make the leap to homeownership, Yun also said it can wedge a gap between those who come from “American families that don’t have deep pockets.”

Like in 2018, 33 percent of all homebuyers are first-time buyers. That number is lower than the historical 40 percent. The median age of a homebuyer is 47, rising for the third year in a row.

Yun also said home prices are expected to grow at 4 percent next year while mortgage rates will remain just below 4 percent. The biggest hurdle to affordability, he said, is lack of inventory. Not enough available, affordable homes are built to meet demand. As a result, prices and competition for homes are growing at a rate that even low mortgage rates and a strong economy cannot offset.

“Low inventory conditions hurt would-be first-time buyers most,” said Yun. “Their homeownership dream and the opportunity to build wealth gets delayed until more inventory choices reach the market.”

Email Veronika Bondarenko

Show Comments Hide Comments


Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Thank you for subscribing to Morning Headlines.
Back to top
Only 3 days left to register for Inman Connect Las Vegas before prices go up! Don't miss the premier event for real estate pros.Register Now ×
Limited Time Offer: Get 1 year of Inman Select for $199SUBSCRIBE×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription