Why the Old Homeownership Milestones No Longer Define Financial Success
Over the past 80 years or so, homeownership has been considered a key measurement of financial success in the United States. Owning a home meant you had good credit, a decent income and enough money saved up to make a down payment.
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But does that still apply in 2026?
Here’s a look at why the old homeownership milestones might no longer define financial success.
Alarming Homebuying Trends
One important thing to know about homeownership in 2026 is that it’s not as accessible to younger adults as it used to be.
In 1991, the average age of a first-time homebuyer was 28 years old, according to data from Self, a credit-building platform. By 2023, the average had risen to 35.
That pattern has not changed in the years since. In 2025, the median age of first-time homebuyers was 40 years old – the highest ever, according to the National Association of Realtors (NAR).
Separate NAR research found that baby boomers still represent the largest generational group of homebuyers in 2026, at 42% of the total. In contrast, millennials make up only 26% of homebuyers and Gen Z only 4%.
One thing these trends show is that homeownership is no longer an important financial milestone for most younger adults — or at least no longer a realistic one.
“Homeownership as a sort of litmus for financial success belongs to the era of pensions and lifetime employment. And as we know, those days are behind us,” said Chad Cummings, attorney and certified public accountant (CPA) at Cummings & Cummings Law, who previously worked in finance and tax.
Major Headwinds to Homeownership
You don’t have to dig very deep to understand why homeownership is becoming harder for younger Americans. All it takes is a glance at recent pricing trends.
Here’s a look at the median sales price of homes sold in the U.S. over the past quarter-century, according to the Federal Reserve Bank of St. Louis:
Q1 2000: $165,300
Q1 2010: $222,900
Q1 2020: $329,000
Q1 2026: $403,200
As the above numbers show, median home prices have risen 144% since the beginning of the century.
Meanwhile, the U.S. Bureau of Labor Statistics data showed that median weekly earnings rose from $568 in early 2000 to $1,235 in early 2026 — a gain of 117%.
When housing prices rise faster than wages, it’s challenging to afford a new home — especially in an era of record-high home prices.
But that only tells part of the story. Another way to look at it is how median earnings compare to median home prices.
In Q1 2000, median earnings were $29,536 a year, or 17.9% of the median home sales price of $165,300. In Q1 2026, median earnings were $64,220 a year, or 15.9% of the median home sales price of $403,200.
This means the typical 2026 income provides 2% less homebuying power than the typical 2020 income. On a $400,000 house, that difference amounts to $8,000 — a pretty big number when you’re saving for a down payment.
Is Homeownership Still a Sign of Financial Success?
Although homeownership has a number of financial benefits — including the equity you build up — it’s no longer a milestone younger Americans can or even should embrace, experts say.
Cummings provided an example of how betting so much on homeownership can backfire.
“I represented a Florida couple last year who bought a home at 28 [years old] because their parents told them renting was ‘throwing money away,’” he said. “That statement is not always correct.”
Within six months, one spouse received a job offer in another state, meaning they had to sell their Florida home.
“They sold at a loss after accounting for closing costs and a decline in the market,” Cummings said. “As a result, they lacked the down payment to buy in the new state and are back to renting.”
One thing you should never do is put so much emphasis on homeownership that you undermine financial security in other areas.
“I see clients who own homes and hold zero liquidity,” Cummings said. “They cannot fund a retirement account and they carry no disability or health insurance. Being ‘house rich and cash poor’ is a recipe for financial instability and even bankruptcy.”
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This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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