In a housing market defined by high prices, elevated mortgage rates, and limited inventory, finding the right home — and the right moment — can feel elusive to aspiring buyers.

The desire to own a home is as strong as ever, but 95% of future home shoppers say something is preventing them from purchasing today, according to a new study of 1,000 Americans who plan to buy a home in the next five years.

For many buyers, the strategy is simple: Wait it out and hope market conditions shift back in their favor. In fact, nearly half (49%) think it will be easier to buy a home five years from now than it is today.

In the meantime, 81% of buyers say there are life goals besides homeownership they would rather achieve in the next five years.

Keep reading to find out what's keeping future home buyers on the sidelines and what could persuade them to enter today's challenging market.

81% of Buyers Prioritize Other Goals Over Homeownership

Homeownership has long been a symbol of success and stability, with many Americans pushed to pursue it. In fact, 1 in 4 future home shoppers (24%) feel social pressure to buy a home.

Although many buyers are eager to own a home, it's not their only priority.

The feeling is particularly strong among young buyers, with 92% of Gen Z and 87% of millennials saying they would put other milestones ahead of homeownership. Meanwhile, nearly 1 in 4 boomers (24%) say no achievement is more important than owning a home in the next five years.

In lieu of purchasing a home, paying off debt tops the list of alternative priorities among all buyers (36%), as well as millennials (38%) and boomers (36%). Gen Z, on the other hand, is fresh out of college and wants to build their career, with 52% saying it's more important than buying a home in the next five years.

Pursuing these priorities may delay homeownership, but they aren't necessarily at odds with it. Fewer debts, higher income, and greater savings ultimately make buying a home more attainable in the long run.

95% of Home Shoppers Say Something Prevents Them From Buying Today

Even buyers who are ready to make homeownership their top priority face barriers that can delay their purchase.

The most common obstacle is high home prices, with nearly half of buyers (48%) saying they are too prohibitive.

Buyers could potentially overcome expensive home prices if mortgage rates offered some relief. But with rates still more than double their pandemic-era lows, buyers remain sidelined by the one-two punch. One-third of buyers say high mortgage rates (33%) prevent them from buying a home right now, along with their inability to afford a down payment (33%).

Unfavorable market conditions deter many buyers from entering the market, even those who are financially ready but can afford to wait for better prices and mortgage rates. Boomers are the most likely to say high home prices (49%), high mortgage rates (33%), and economic uncertainty (33%) prevent them from purchasing a home today.

Young buyers, on the other hand, are waiting because they don't feel financially ready. After high prices, Gen Z and millennials say they can't purchase a home because their income isn't high enough (29% and 36%, respectively) and they can't afford a down payment (28% and 34%, respectively).

Half of Home Shoppers Think Buying a Home Will Be Easier in 5 Years

About 70% of future home shoppers worry about buying a home at the "wrong" time, and today's high prices and mortgage rates make the market feel pretty unfavorable. In fact, more than 3 in 4 home buyers (77%) think it's more difficult to purchase a home today than it was five years ago.

Home shoppers, however, are optimistic the market will eventually tip back in their favor.

Few buyers anticipate lower home prices, but many are betting on lower borrowing costs. Almost half (47%) think mortgage rates will be lower in five years than they are today, compared to just 39% who say the same about home prices.

More Than Half of Future Buyers Would Enter the Market If Home Prices Dropped

Approximately 84% of home shoppers don't plan to buy in the next year, but many could be motivated to start looking sooner if the market became more buyer friendly.

Buyers are more likely to act on a change in market conditions than a change in their personal circumstances.

Personal circumstances carry far less weight, with only 24% saying they would start searching for a home because of a change in their living situation and just 14% saying they would do so because of a major life event, such as getting married or having a child.

Home buying is more often tied to a major life event among young adults, with 26% of Gen Z and 18% of millennials saying it would cause them to start looking for a home, compared to 8% of boomers. Yet these buyers are also driven by financial feasibility, not just the improvement of macroeconomic market conditions:

• 44% of Gen Z and 47% of millennials would start seriously looking for a home if they earned a higher income — 2x the percentage of boomers (20%).
• 32% of Gen Z and 31% of millennials would start looking for a home if their job stability improves — 4x the percentage of boomers (7%).

Meanwhile, just as lower home prices would prompt buyers to speed up their home purchase, higher home prices are the most likely reason buyers would delay their purchase. More than half of buyers (53%) would delay a home purchase if home prices increased, followed by 41% who would do so if mortgage rates rose.

Buyers may be prepared to wait for home affordability to improve, but after seeing little change in the post-pandemic market, many are feeling discouraged. More than half (58%) worry they may never be able to purchase a home.

2 in 3 Buyers Can't Afford the Median-Priced Home

Home prices have dipped slightly since peaking in 2022, but ongoing inflation and high living costs have limited what aspiring home buyers can afford.

Interestingly, buyers with the most limited budgets are the ones most likely to splurge on a home. With unrealistic expectations about what they can comfortably afford, nearly half of Gen Z (45%) say they'd pay $400,000 or more for a home, compared to just 38% of millennials and 30% of boomers.

At the same time, Gen Z may be more accepting of expensive housing and high debt burdens as the cost of entering the market, especially in the job- and amenity-rich cities where they most want to live.

Regardless of how much buyers are willing to stretch themselves financially, many will ultimately have to sacrifice some of their desired features for a home they can realistically afford.

1 in 6 Home Shoppers Are Waiting for 3% Mortgage Rates Before Buying

High home prices seem to have deterred many buyers from entering the market, but the same can't be said for high mortgage rates. Rates have more than doubled since their pandemic-era lows, and although buyers regret missing out, they are adjusting to their new reality.

In fact, many would agree to a rate higher than today's 6.5% if it meant finally buying a home.

Despite carrying higher debt burdens, young buyers are more likely to stomach a high mortgage rate in their desperation to own homes. Gen Z (28%) and millennials (28%) are twice as willing as boomers (13%) to accept a mortgage rate of 7% or more.

Yet nearly 1 in 4 buyers (24%) are concerned about locking in a high mortgage rate and not being able to refinance.

Rather than risk getting stuck with a high rate, some buyers are planning to wait it out — making them less willing to tolerate today's elevated borrowing costs.

Of those planning to buy within the next year, 63% would accept a mortgage rate above 6%, and 34% would accept a rate of 7% or higher. Only 38% and 21% of those who plan to buy in three to five years say the same, respectively.

Some buyers aren't just waiting for rates to ease. They're waiting for a significant drop to the historic lows of the pandemic.

Although these buyers hope that waiting will lead to lower rates, there's no guarantee rates will ever drop that low again.

40% of Home Buyers Are Worried About Affording Their Monthly Payment

With the cost of living continuing to climb, nearly 1 in 4 aspiring home buyers (24%) don't think they'll be financially prepared to purchase a home in the next five years. That lack of preparation could have real consequences for those who manage to make it to the closing table.

Assuming future buyers put down 20% on the median-priced home at today's interest rate, principal and interest alone would cost $2,041 a month. When property taxes and homeowners insurance are included, the amount will be even higher.

With many older buyers living on fixed incomes, they are the most likely to cap their monthly housing expenses below today's typical cost. About 66% of boomers say they'd only feel comfortable paying less than $2,000, while just 43% of Gen Z say the same.

Millennials sit between the two extremes at 53% but lean more cautious thanks to other ongoing expenses, such as child care, for which they need to budget.

Not all buyers are drawing the line at $2,000, though. About 43% of future home shoppers say they would feel comfortable paying above the typical mortgage payment.

However, every $1,000 added to the monthly payment reduces the prospective buyer pool by more than half. Only 20% could afford a monthly payment of more than $3,000, and only 8% could afford a monthly payment of more than $4,000.

The steep dropoff at each threshold reveals that many home buyers can stretch to a point, but beyond that, the financial and lifestyle tradeoffs become too steep to justify.

AI, Social Media Reshape How Buyers Learn About Homeownership

More than half of Americans (54%) who plan to purchase a home in the next five years are not confident in their knowledge of the home-buying process, including an identical 54% who plan to buy this year.

Affording the upfront and ongoing costs of homeownership is buyers' biggest concern, and many wish they were better informed about the true costs:

• 40% of buyers are concerned about rising property taxes, and 39% wish they knew how much they'd pay in taxes over time.
• 37% are concerned about unexpected repairs and maintenance costs, and 43% wish they knew more about the hidden costs of homeownership.
• 29% are concerned about unexpected fees, and 35% wish they knew how much they'd pay for closing costs.

Future buyers fear that being uninformed could be costly, with nearly 1 in 5 (18%) worrying that their lack of understanding about the process could lead to expensive mistakes.

To fill in their knowledge gaps, future shoppers are turning to new sources.

Unsurprisingly, young buyers are the most likely to embrace these new sources of information. Approximately 49% of Gen Z and 36% of millennials plan to use social media to learn about home buying — 3x and 2x the rate of boomers (15%) who say the same, respectively.

AI adoption is more consistent across generations, but young shoppers still tend to use it more. About 40% of Gen Z and 41% of millennials plan to use AI as a home-buying resource, compared to 30% of boomers.

Specifically, nearly half of home shoppers using AI plan to use it to get step-by-step information about the home-buying process (49%), understand mortgage rates and loan options (47%), estimate how much home they can afford (46%), and learn what to look for during a home inspection (45%).