Connect with us

Personal Finance

Why fewer young adults are able to invest in homeownership

Published

1 year ago

on

FILE PHOTO: An “Open House” sign outside of a home in Washington, DC, US, on Sunday, Nov. 19, 2023. 

Nathan Howard | Bloomberg | Getty Images

When Maryland Governor Wes Moore was 8 years old, his mother told him she wanted to send him to military school to correct his behavior.

Yet it wasn’t until he was 13 that she finally did send him to a military school in Pennsylvania. He ran away five times in the first four days.

“That place ended up really helping me change my life,” said Moore while speaking about retirement security at a BlackRock conference in Washington, D.C., on March 12.

One obstacle — the tuition costs — prevented his mother from sending him sooner, he said.

Impact of federal job and spending cuts on Maryland

Moore was able to attend the school thanks to help from his grandparents, who borrowed against the home they bought when they immigrated to the U.S., to help pay for the first year’s tuition.

“They ended up sacrificing part of their American dream so I could achieve my own,” Moore said.

“That’s what housing helps provide,” Moore said. “It’s not just shelter. It’s security; it’s an investment. It’s a chance you can tap into something if an emergency happens. It’s a chance that you now have an asset that you can hold onto, and you can pass off to future generations.”

After retirement funds, housing generally represents the second-most-valuable asset people have, Moore said.

Some now less likely to own homes than in 1980

Yet achieving that homeownership status can feel unattainable to prospective first-time buyers in today’s economy.

Around 30% of young Maryland residents are thinking of leaving the state because of high housing costs, Moore said.

Both renters and homeowners across the U.S. are struggling with high housing costs, according to a 2024 report from the Joint Center for Housing Studies of Harvard University. The number of cost-burdened renters — meaning those who spend more than 30% of their income on rent and utilities — climbed to an all-time high in 2022. At the same time, millions of prospective homebuyers have been priced out by high home prices and interest rates.

Many hopeful first-time home buyers may feel that it was easier for their parents and grandparents’ generations to reach home ownership status.

Research shows those feelings are justified.

More from Personal Finance:
Here’s when to list your home for sale this spring
Tax season is prime time for scams. How to protect yourself
How rent can make or break your credit

Since 1980, median home prices have increased much faster than median household incomes, according to recent research from the Urban Institute.

Across the country, today’s 35- to 44-years olds — who are in their critical homebuying years — are less likely to be homeowners than in 1980, according to the research.

For that age cohort, the homeownership rate has dropped by more than 10% compared to 45 years ago, the Urban Institute found. Because today’s 35- to 44-year-olds are also forming households at a lower rate, that number is likely understated, according to the research.

Ultimately, that can have lasting impacts on their ability to build wealth, said Jun Zhu, a non-resident fellow at the Urban Institute’s Housing Finance Policy Center.

“When you have a house, when the house appreciates, you’re going to earn home equity,” Zhu said. “Earning home equity is actually a very important way to earn wealth.”

Those 35- to 44-year-olds who are in lower income quartiles have seen the biggest declines in homeownership compared to their peers. That is driven in part by the fact that people who are married are more likely to be homeowners, while lower-income individuals are less likely to be married.

Education is also a factor in widening the homeownership gap, according to the Urban Institute, as a smaller share of heads of households who have the lowest incomes are getting college degrees.

Racial divide in homeownership rates persists

Separate research from the National Association of Realtors also points to a racial divide with regard to housing affordability.

In 2023, the latest data available, the Black homeownership rate of 44.7% saw the greatest year-over-year increase among racial groups but was still well behind the white homeownership rate of 72.4%. Other groups fell in between, with Asians having a 63.4% and Hispanics having a 51% homeownership rate.

Strong wage growth and younger generations reaching prime home buying age contributed to the increase in Black homeownership in 2023, said Nadia Evangelou, senior economist and director of real estate research at the National Association of Realtors.

Yet the Black homeownership rate has stayed below 50% over the past decade, Evangelou said, which means most continue to rent instead of owning. That ultimately limits their ability to grow their net worth and accumulate wealth.  

Policy changes could make it easier for Americans to buy their first home. That could include providing educational opportunities for low-income households, offering down payment assistance and encouraging housing production by reducing zoning restrictions or other regulatory barriers, according to the Urban Institute.

Related Topics:
Continue Reading

Personal Finance

Navigating Residential Real Estate and Mortgage Strategy

Published

3 weeks ago

on

August 15, 2026

By

The 2026 residential real estate market presents a nuanced landscape for homebuyers, current homeowners, and property investors. With benchmark mortgage rates adjusting alongside Treasury yield movements, real estate strategies require careful evaluation of borrowing costs, local market supply dynamics, and long-term home equity management.

Adapting Homebuying Strategies to Mortgage Dynamics
Prospective homebuyers are adapting to fixed 30-year mortgage rates hovering between 6.0% and 6.8%. While borrowing costs are elevated compared to historical lows seen in prior decades, moderating home price growth across several regional markets is creating selective opportunities for buyers with strong credit profiles.

Homebuyers are increasingly utilizing strategic mortgage options:
– Builder Rate Buydowns: Purchasing new construction homes where developers offer temporary or permanent interest rate buydowns to lower initial monthly payments.
– Adjustable-Rate Mortgages (ARMs): Selecting 5/1 or 7/1 hybrid ARMs with strict rate caps for short-to-medium-term housing plans.
– Points and Financing Structure: Evaluating upfront discount point purchases to secure lower fixed interest rates over the loan term.

Home Equity Utilization and Renovation Financing
For existing homeowners holding low-rate legacy mortgages, moving to a new property often entails relinquishing favorable debt terms. Consequently, many homeowners are choosing to renovate and expand existing properties rather than sell.

Home Equity Lines of Credit (HELOCs) and home equity loans allow homeowners to access accumulated property equity for capital improvements without disturbing their primary mortgage rate. Utilizing home equity for value-adding property renovations can enhance living space while increasing long-term property values.

Strategic Real Estate Investment Guidelines
For residential property investors, achieving positive cash flow requires strict underwriting standards:
– Stress-Test Operating Expenses: Factor in rising property insurance premiums, local property taxes, and ongoing maintenance reserves.
– Focus on High-Growth Rental Markets: Target regions experiencing steady job growth and sustained tenant demand.
– Maintain Cash Buffers: Ensure property portfolios maintain dedicated emergency reserves to navigate unexpected vacancy periods or major repairs.

Actionable Homeownership Steps
1. Evaluate Complete Monthly Housing Costs: Assess property taxes, homeowners insurance, and HOA fees alongside principal and interest.
2. Leverage Renovation Equity Carefully: Utilize equity loans strategically for renovations that generate long-term property value.
3. Prioritize Credit Score Optimization: Secure top-tier credit scores prior to mortgage pre-approval to qualify for competitive lender pricing tiers.

Continue Reading

Personal Finance

$20,000 Caution Bond Requirement for US Visa Applications imposed on 50 Countries

Published

4 weeks ago

on

August 8, 2026

By

The United States Department of State has officially implemented a revised visa policy introducing a mandatory posting requirement for caution payments of up to $20,000 on select foreign travel applications. Under the updated regulatory framework, consular officials are authorized to require temporary nonimmigrant visa applicants from targeted foreign countries to post a refundable financial bond of $20,000 as a condition for visa issuance. The policy mechanism is designed to address diplomatic concerns regarding high overstay rates among temporary visitor, business, and educational visa categories.

The caution bond pilot program applies selectively to foreign nationals from designated countries whose diplomatic entities record historical visa overstay rates exceeding established federal thresholds. Under administrative guidelines published by the State Department, the full financial deposit is posted directly to a dedicated federal escrow account prior to final visa issuance. The entire caution payment is automatically refunded to the applicant upon verified proof of timely departure from the United States in strict compliance with the authorized duration of stay. Conversely, failure to depart within the legal timeframe results in full forfeiture of the posted financial bond to the United States government.

Diplomatic representatives and travel policy experts have expressed varying perspectives regarding the operational implementation of the caution bond system. Administration officials emphasize that the measure serves as an effective, market-based incentive to enforce international travel compliance and preserve domestic immigration security standards. However, international trade organizations and foreign diplomatic missions have raised concerns regarding the financial burden imposed on legitimate business travelers, foreign students, and commercial partners from developing nations.

The United States finalized the rule to make the temporary visa bond program permanent, taking effect on August 3, 2026. The updated permanent regulation replaces the prior 12-month pilot, eliminates the lowest $5,000 tier, and raises the maximum required bond amount to $20,000 for specific B-1/B-2 business and tourist visa applicants.

Here is the list of the 50 countries on the list as o August 3, 2026

African Nations (31 Countries)

  • Algeria
  • Angola
  • Benin
  • Botswana
  • Burundi
  • Cabo Verde (Cape Verde)
  • Central African Republic
  • Côte d’Ivoire (Ivory Coast)
  • Djibouti
  • Ethiopia
  • Gabon
  • The Gambia
  • Ghana
  • Guinea
  • Guinea-Bissau
  • Lesotho
  • Malawi
  • Mauritania
  • Mauritius
  • Mozambique
  • Namibia
  • Nigeria
  • São Tomé and Príncipe
  • Senegal
  • Seychelles
  • Tanzania
  • Togo
  • Tunisia
  • Uganda
  • Zambia
  • Zimbabwe

Asian & Eastern European Nations (11 Countries)

  • Bangladesh
  • Bhutan
  • Cambodia
  • Georgia
  • Kyrgyzstan
  • Mongolia
  • Nepal
  • Papua New Guinea
  • Tajikistan
  • Turkmenistan
  • Uzbekistan

Caribbean & Latin American Nations (5 Countries)

  • Antigua and Barbuda
  • Cuba
  • Dominica
  • Grenada
  • Venezuela

Oceanian Nations (3 Countries)

  • Fiji
  • Tonga
  • Vanuatu

Continue Reading

Personal Finance

Next-Generation Retirement Planning: Managing Longevity Risk and Variable Income Streams

Published

4 weeks ago

on

August 7, 2026

By

Retirement planning strategies are evolving in 2026 to address increased life expectancies, shifting dynamic market conditions, and the transition away from traditional defined-benefit pensions. Individual investors and financial advisors are abandoning rigid retirement models in favor of flexible, multi-asset strategies designed to mitigate longevity risk and preserve purchasing power over multi-decade retirement horizons.

Mitigating Longevity Risk with Dynamic Asset Allocation
As average life expectancies extend past eighty-five years, one of the primary financial risks facing retirees is outliving their accumulated wealth. Traditional fixed income allocations—such as the standard 60/40 equity-to-bond portfolio—are being reevaluated to ensure portfolios generate sufficient capital growth alongside reliable income.

Financial planners recommend maintaining a meaningful equity allocation throughout retirement to offset long-term inflation erosion. High-dividend equity funds, global real estate investment trusts (REITs), and inflation-indexed Treasuries are combined to create diversified portfolios that deliver both growth and income stability.

The Transition to Dynamic Withdrawal Strategies
The classic “4% safe withdrawal rule” is increasingly replaced by dynamic withdrawal strategies that adapt annually based on market performance. Under a dynamic withdrawal framework, retirees adjust their annual distribution rates within pre-set caps and floors:
– Market Upside: During strong market returns, retirees can increase discretionary spending or fund family legacy gifts.
– Market Downturns: During market pullbacks, spending distributions are temporarily reduced to prevent sequence-of-returns risk and preserve core investment principal.

Guaranteed Lifetime Income Options and Deferred Annuities
To establish a guaranteed baseline for essential living expenses, individuals are incorporating modern fixed-indexed and deferred longevity annuities into their broader retirement architectures. Modern annuity structures offer competitive return caps, transparent fee schedules, and inflation-adjustment options.

By funding essential expenses—such as housing, healthcare, and insurance—with guaranteed income streams from Social Security, pensions, and annuities, retirees can manage discretionary investment portfolios with greater flexibility and lower emotional stress during market volatility.

Actionable Steps for Future Retirees
1. Calculate Baseline Retirement Expenses: Determine fixed living costs and map guaranteed income sources to cover essential expenditures.
2. Adopt Flexible Withdrawal Rules: Implement dynamic spending rules to protect investment principal against market downturns.
3. Incorporate Inflation-Protected Assets: Maintain exposure to dividend-growing equities and inflation-indexed bonds to safeguard long-term purchasing power.

Continue Reading

Trending