Suze Orman Says It’s Incredibly Difficult for Young People To Buy a Home — Here’s Why
Written by
Josephine Nesbit
Edited by
Jenna Klaverweiden
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Home affordability is the worst it’s been in decades, especially for younger first-time homebuyers.
According to the 2024 National Association of Realtors (NAR) Home Buyers and Sellers report, saving for a down payment remains a top challenge for first-time buyers. The NAR survey also found that a quarter of first-time buyers received down payment help in the form of a gift or loan from a family member or friend.
In a recent episode of the “Women and Money” podcast called “Ask KT and Suze Anything: When Is the Right Time to Self-Insure?” personal finance expert and bestselling author Suze Orman discussed her thoughts on why it’s “incredibly difficult” for young people to buy a home and what can be done about it.
Why It’s Difficult for Young People To Buy a Home
Orman explained that average home prices are around $400,000. Considering that figure, many younger people have been priced out of the housing market.
“That means at least $80,00 down, insurance is through the roof, property taxes are through the roof,” Orman said. “There are tens of thousands of jobs that are going away.”
Even homeowners in Florida who own their homes outright have been forced to sell due to high insurance premiums, Orman added.
According to data compiled by the U.S. Department of the Treasury’s Federal Insurance Office, average homeowners insurance premiums per policy increased 8.7% faster than the rate of inflation between 2018 and 2022. Some homeowners’ premiums have increased much more than that, particularly for those who live in areas at higher risk of climate-related perils.
Property taxes also saw a significant increase, which typically rise alongside home prices. CoreLogic found that tax bills rose an average of 27% from 2019 to 2024.
Here’s What To Do About It
If you can’t afford a home, Orman recommended just renting.
“It’s okay to just rent,” she said. “With insurance and things like that, it just might be too expensive.”
Nationally, new monthly mortgage payments outpace rental prices by 35%, real estate firm CBRE found. And if you live in cities like Los Angeles and Austin, homeownership costs nearly 2 1/2 times the average rent.
“It’s better to have something than nothing,” she said. “If you can’t afford a home, alright, at least start saving for the future.”
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