Giving Up on Homeownership Can Hurt You in the Long Run

For generations, homeownership has been a cornerstone of the American Dream. Owning a home represents stability, a way to build credit, and a powerful path to long-term wealth through equity.

But today, that dream feels increasingly out of reach.

As home prices in the United States continue to outpace wage growth, more young Americans are starting to question whether they will ever own a home at all.

A Growing Sense of Hopelessness

The numbers tell a concerning story.

• A 2022 survey by Apartment List found that nearly 25% of millennials expect to rent forever — almost double the 13% recorded in 2018.

• A 2024 Harris Poll revealed that 42% of U.S. adults — and nearly half of Gen Z — agree with the statement:“No matter how hard I work, I will never be able to afford a home I really love.”

That’s not just a housing issue. It’s a psychological shift with potentially long-term economic consequences.

What Happens When People Stop Believing?

Economists studying this trend wanted to understand how fading hopes of homeownership might shape financial behavior over a lifetime.

To explore this, researchers built a mathematical model simulating household financial decisions from age 20 to 75. The model incorporated:

• Wage growth and volatility

• Rising home prices

• Savings patterns

• Mortgage debt

• Risk tolerance

• Desire to pass wealth to children

Using real-world data from the Federal Reserve’s Survey of Consumer Finances and U.S. Census data, they compared generations and projected outcomes.

The findings were striking.

Roughly 84% of people born in 1950 eventually purchased a home — closely matching real Census data.

But only 74% of those born in 1990 are expected to reach that milestone.

That 10-percentage-point drop may seem modest — but its ripple effects are profound.

The Fork in the Road at Age 20

The research compared two hypothetical 20-year-old renters who start with similar financial resources.

The Hopeful Renter

This individual believes homeownership is achievable. As a result, they:

• Save aggressively

• Work harder

• Accumulate wealth steadily

• Eventually purchase a home

• Continue building equity and savings into later life

The Discouraged Renter

This individual sees homeownership as unlikely. Over time, they:

• Save less

• Consume more relative to their wealth

• Take riskier financial bets

• Accumulate little to no assets

• Live largely paycheck to paycheck

The divergence begins early — when the decision to save for a house is either embraced or abandoned. That single turning point can lead to enormous differences in lifetime wealth.

Riskier Bets and Reduced Work Effort

When housing feels unattainable, people may redirect their financial energy elsewhere.

Researchers observed that renters with a net worth below $300,000 are significantly more likely than comparable homeowners to invest in cryptocurrencies. Among wealthier Americans, homeowners and renters invest in crypto at similar rates. But among lower-net-worth households, renters are far more likely to take these speculative risks.

It may be an attempt to “gamble” back into the housing market.

Work behavior also shifts.

Among homeowners, only about 2% to 3% report reduced work effort, regardless of wealth level. The same holds for high-net-worth renters.

But among renters with lower net worth, the share reporting lower work effort rises to 4% to 6%.

While critics sometimes label these patterns as laziness or “quiet quitting,” the research suggests a deeper structural explanation: when long-term incentives fade, behavior changes.

If working harder no longer brings you closer to buying a home, motivation weakens.

The Broader Economic Impact

The consequences extend beyond individual households.

The model suggests that people who give up on homeownership may:

• Work fewer hours

• Earn less income

• Pay less in taxes

• Contribute less to overall economic productivity

Over time, this could shift fiscal burdens and reduce economic growth.

The housing affordability crisis isn’t just about ownership rates — it may influence national productivity and wealth formation.

Can Policy Restore Hope?

Policymakers have proposed various solutions to address affordability, including mortgage bond stimulus programs and efforts to increase housing supply.

While the effectiveness of specific proposals remains debated, the research suggests one key insight: Timing matters.

If financial support reaches households before they give up, it may reinforce saving behavior and long-term planning. But once discouragement sets in and habits change, reversing course becomes much more difficult.

In other words, hope itself may be a critical economic asset.

The Bigger Picture

Forgoing homeownership can be a rational response to skyrocketing prices. Saving for years only to watch homes become even more unaffordable is discouraging.

But the long-term behavioral effects of giving up may be far more costly than many realize.

Homeownership has traditionally served as a powerful anchor for disciplined saving, career ambition, and wealth building. When that anchor disappears, financial trajectories can shift dramatically.

The housing affordability crisis may not only reshape who owns homes — it may reshape how an entire generation works, saves, invests, and builds wealth.

And that could have consequences lasting far beyond the housing market itself.

Source: Bloomberg

Can One Income Still Buy a Home? Lessons from The Simpsons

For many viewers, The Simpsons feels unrealistic—not because the characters are bright yellow or because Homer is somehow a nuclear safety inspector, but because the Simpson family enjoys a comfortable middle-class life on just one income. A detached home, a car, and the occasional family holiday, all supported by a single breadwinner with only a high-school education, feels increasingly out of reach for modern homebuyers.

In today’s housing market, single-income households are becoming rare. Data from the United States show a sharp shift over the past several decades. In 1960, more than three-quarters of young married couples who had just bought a home relied on one income. Today, that figure is closer to one in three. While this reflects positive changes—such as greater employment opportunities for women—it also highlights the rising cost of homeownership and family life.

From the 1960s through 2000, more women entered the workforce, with participation rates among prime-age women rising from around 40% to over 75%. Although that growth has leveled off in recent years, the share of single-income homebuyers has continued to fall. The steepest drop occurred between 2012 and 2023, a period marked by rapidly rising home prices. In short, dual incomes are now often necessary not just for lifestyle upgrades but for basic affordability.

The debate around single-income families continues. Some analysts argue that dual-income households have helped push up the cost of housing, childcare, healthcare, and education. Others say that many families would prefer one parent to stay home, but financial realities make that difficult. Surveys suggest that about half of American mothers would prefer to stay home rather than work, yet most continue working—largely because the additional income is essential.

Housing costs play a major role in these decisions. Studies show that in families where the primary earner’s income rises significantly, the likelihood of the other partner working full-time drops—but mostly among homeowners rather than renters. This suggests that once housing is secured and financial pressure eases, some families choose to scale back to a single income. However, the income required to make that possible today is far higher than it was in previous generations.

It’s important to note that this isn’t simply a story of hardship. Many people enjoy their careers and choose to work for reasons beyond necessity. Expectations have also changed. Homes today are larger, more comfortable, and better equipped than those in the mid-20th century. With bigger homes and higher living standards come higher costs—and often the need for two incomes.

For real estate professionals and homebuyers alike, the takeaway is clear: housing affordability and lifestyle expectations are deeply connected. If housing were easier and cheaper to build, more families might find it feasible to live on a single income again. Until then, the “Simpsons-style” single-breadwinner household remains more of a nostalgic ideal than a common reality.

Source: The Economist

HOA can impose property construction restrictions

Can a homeowners' association restrict me to only build a two-story house?. Are these kinds of restriction allowed?

Yes, homeowners' associations (HOAs) and exclusive subdivisions often have restrictions on home construction, including height limits, architectural styles, and building materials. These rules are typically outlined in the deed of restrictions, subdivision rules, or master deed that you agreed to when purchasing the lot.

One of the most important features of Philippine Property law is the right to ownership which is protected by Republic Act (RA) 386, otherwise known as the "Civil Code of the Philippines." Articles 427 and 428 of the Civil Code of the Philippines define ownership as the independent and general right of a person to control a thing, particularly in terms of use, possession, enjoyment, disposition, and recovery, subject only to certain limitations established by law or agreements, viz.:

"Article 427. Ownership may be exercised over things or rights.

"Article 428. The owner has the right to enjoy and dispose of a thing, without other limitations than those established by law.

"The owner has also a right of action against the holder and possessor of the thing in order to recover it."

Relative thereto, Sections 10 and 18 of Republic Act (RA) 9904, otherwise known as the "Magna Carta for Homeowners and Homeowners' Association," provide for the rights and powers of the homeowners' associations (HoAs), to wit:

"Section 10. Rights and Powers of the Association. - An association shall have the following rights and shall exercise the following powers:

(j) Cause compliance with regard to height regulations, easements, use of homes, buildings, edifices, or structures that may be built within the subdivision, in accordance with the National Building Code, zoning laws, HLURB rules and regulations, existing local ordinances, and existing deeds of restriction;"

Clearly, our laws recognize the owner's right to control the property in line with these principles, subject to any limitations imposed by contracts, local ordinances, or zoning rules and regulations. Relative to validity of restrictions in deeds or contracts, Cezar Yatco Real Estate Services, Inc. vs. Bel-Air Village Association, Inc. GR 211780, 21 November 2018, with Honorable Associate Justice Marvic M.V.F. Leonen as ponente, is instructive:

"The Deed Restrictions is a restrictive covenant that governs how lot owners can use or enjoy their properties. It was annotated on the land titles issued to the lot owners and it is not disputed that lot owners are bound by these annotations under Section 39 of Act 496, or the Land Registration Act, which provides:

"Section 39. Every applicant receiving a certificate of title in pursuance of a decree of registration, and every subsequent purchaser of registered land who takes a certificate of title for value in good faith, shall hold the same free of all encumbrance except those noted on said certificate, and any of the following incumbrances which may be subsisting, ..."

Thus, if there is indeed a validly instituted restriction on the number of stories or floors that can be built on the property that you purchased, then the same may be imposed or implemented by the HoA.

Corollary, as a buyer, you are duty-bound to comply with such restriction as it forms part of your contractual obligation when you purchased the subject property. Although, as owner of the property, you have rights to use and develop it, these rights are not absolute and must comply with laws, contracts, local ordinances, and zoning rules and regulations.

Source: Manila Times