What’s Lost When Younger Americans Can’t (Or Don’t) Buy Homes

Christians have long seen themselves as exiles, citizens of another world, who sojourn through this veil of tears with the hope that a heavenly kingdom awaits. However, the trope of exile has another aspect. The prophet Jeremiah instructed the Hebrew exiles to make a life in the place where God put them: 

Build houses and live in them; plant gardens and eat their produce. Take wives and have sons and daughters; take wives for your sons, and give your daughters in marriage, that they may bear sons and daughters; multiply there, and do not decrease. But seek the welfare of the city where I have sent you into exile, and pray to the Lord on its behalf, for in its welfare you will find your welfare. (Jer 29:5-7)

The Babylonian captivity provides a model for Christian exile. We should not pine away for another homeland or another mode of existence. Rather, we should establish homes, raise children, plant gardens, and live in ways that benefit the communities to which we’ve been called. The first aspect of this command to live well in exile is to “build houses.” The admonition suggests that the long-term stability of the community is fundamentally tied to stable homes. In our present cultural context, it seems plausible that a vital component of living faithfully in exile is homeownership. 

I am not saying that Christians who rent rather than own cannot live out their callings faithfully. There will always be those who cannot afford their own homes, and this includes young people who aspire to one day own but do not yet have the resources to make that happen. Additionally, it is likely there will always be those who, for various reasons, have no aspiration to homeownership regardless of their resources. 

However, it does seem clear that the stable society described by Jeremiah — when translated into a contemporary idiom — is one where homeownership is the norm. Homeownership roots people in particular places where families and gardens can be raised and where the welfare of the city can best be facilitated. 

If this is the case, then something is seriously amiss in the American economy. In recent decades, economic factors have conspired to make the purchase of a home increasingly elusive for many. The pressures are most acute on the young.

Consider some of the challenges faced by young people today. First, home prices have increased dramatically in recent years. This increase has not been matched by rises in income. According to Zillow, in 2022, a single-family home cost “a record 5.3 times more than the median household’s income — double what is considered affordable.” This increase in housing prices has been, at least in part, driven by a marked increase in real-estate investors buying homes to flip or to rent. Rising prices have in recent months been accompanied by increasing interest rates. Over the last six months, interest rates on a 30-year fixed mortgage have increased from record lows to more than seven percent, a rate that has not been seen since 2000. This increase in interest rates is a reflection of the Fed’s attempt to rein in inflation, which in recent years has been acute. 

Of course, consumer prices have been rising for decades. Over a 50-year period, from 1972 to 2022, the cost of college has more than doubled after adjusting for inflation. This has resulted in dramatically increased student debt burdening graduates before they even consider purchasing a house. Car prices have also increased dramatically. According to Kelley Blue Book, in 2022 the average sticker price for a new car was over $48,000. By contrast, in 1972 the average price of a new car was $3,690 — $26,100 in current dollars — an increase of 85 percent. These impediments have led many young people to conclude that homeownership is simply beyond their reach, and many despair of ever owning a home.

Given the stark fact that homeownership is increasingly out of reach for many, we are faced with an obvious question: What are the social consequences of this decline? 

1. Increased mobility and a corresponding decrease in commitment to particular communities. Homeownership stabilizes communities. The sort of real property represented by homeownership is not mobile. Homes tie people to communities and encourage the habit of rootedness. Homeownership provides a sort of anchor, grounding one’s assets in a particular community, and makes possible the concerted attention to a particular place that is required if we are, in the words of Jeremiah, to “seek the welfare of the city.”

2. Increased insecurity and increased reliance on the state. The American founders understood a principle that we would do well to relearn: Property ownership facilitates the creation of economically secure citizens who do not reflexively look to the state for their daily bread. Interdependence and practical neighborliness can best be cultivated in people who own enough property to care for themselves, their families, and their neighbors in need. In other words, generosity requires assets, and homeownership is a vital component of asset development. 

3. Decrease of intergenerational wealth transfers. Historically, one of the significant sources of wealth has been inheritance. And of course, inheritance was often tied to land or other durable assets including homes. The capacity and inclination to pass on durable assets to the next generation helped facilitate long-term, intergenerational attention in citizens as well as the practical ability to purchase a home. Such a long-term disposition countered the siren song of presentism that manifests itself today in rampant consumerism and a corresponding cult of disposability. 

4. Delayed family formation. It is no secret that young people are delaying marriage and parenthood. In various ways the foregoing factors all contribute to this shift. It seems likely that the inability to establish a settled housing arrangement might lead to the conclusion that marriage and children should be put off until such arrangements can be secured. In a world characterized by unattached, insecure citizens, the burden of family responsibilities can be daunting and may appear insurmountable to many. Owning a home, or the realistic prospect of doing so, can provide a degree of stability and security that makes family formation more readily imaginable.

The sentiment animating these related challenges can, perhaps, be summarized in a principle: A healthy society is one where material security exists and is rooted in a thick and complex amalgam of interpersonal relationships and connections not directly dependent on the state. In the context of 21st-century America, homeownership is a vital element underwriting a healthy society and is, therefore, an important component for exiles seeking the welfare of a city. To the extent that stable communities, economic security, intergenerational wealth transfers, and family formation contribute to a healthy society  —  to the welfare of the city  —  policies that facilitate homeownership should be a priority for policy-makers.