Young Buyers Face a Steeper Climb to Homeownership Than Ever Before
Buying a home has become far harder for young people than it was for previous generations. A new study by the Kiel Institute for the World Economy (IfW) shows that soaring property prices and higher taxes have pushed down payments out of reach for many. The findings, released on Wednesday, highlight a growing reliance on gifts and inheritances to secure housing.
In the 1980s, the baby boom generation needed just three years of savings to afford a condominium down payment. Today, that same down payment requires more than three years of salary—double the time. For single-family homes, the gap is even wider: the required equity has jumped from 3.6 times annual earnings in the 1980s to over five times now.
The study underscores how much harder it has become to buy property without external help. Gifts and inheritances now play a far bigger role in making homeownership possible. For most young buyers, the dream of owning a home depends increasingly on financial support from relatives.
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