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Home Affordability

How Rising Living Costs Are Changing the Way We Think About Homeownership

Aiden Lowrie by Aiden Lowrie
February 25, 2025
in Affordability, Buying a Home
Reading Time: 5 mins read
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In recent years, rising living costs have shifted the way many of us think about and approach homeownership. What was once considered a traditional marker of success and financial security is increasingly becoming a daunting prospect. With housing prices soaring and living expenses climbing in tandem, the path to homeownership is no longer as straightforward or attainable as it once was.

The Price of Homeownership: An Unaffordable Dream

In many cities across the globe, home prices have surged dramatically. According to recent data from the National Association of Realtors, the median home price in the United States has reached an all-time high of over $400,000, making it difficult for first-time homebuyers to enter the market. For many, the dream of owning a home seems more distant than ever. Before 2020, the national median home price was under $300,000. These price increases, coupled with rising interest rates, have caused monthly mortgage payments to rise exponentially, pushing homeownership beyond the reach of many potential buyers.

Moreover, the increased costs of living, including higher prices for utilities, food, and transportation, have strained household budgets. According to a Zoocasa analysis of U.S. Labor Statistics data, average annual housing expenditures increased by 48.3% from 2013 to 2023. For many, allocating a large portion of income toward housing costs leaves little room for other necessary expenses, leading to a shift in priorities. The financial strain is further exacerbated by stagnating wages in some areas, while inflation continues to climb.

  • Read: The Impact of Rising Costs on First-Time Home Buyers in the U.S.

A Shift in Mindset: Renting Over Owning

As the barriers to homeownership rise, renting is becoming a more viable option for many. In cities like New York, San Francisco, and Toronto, renting is often the only option for people who want to live near their workplaces and maintain a decent quality of life. With rent prices also climbing, the debate between renting and buying is becoming more complex. For those who cannot afford to purchase homes, renting offers flexibility without the long-term commitment and financial burden that comes with homeownership.

In some cases, renting may actually make more sense financially, particularly in urban areas where home prices are prohibitively high. Renting allows individuals to allocate their savings to other investments or savings vehicles that may provide higher returns than putting a large down payment on an expensive property. Additionally, the costs of maintenance, property taxes, and insurance—often overlooked when purchasing a home—are included in rental agreements, providing tenants with more financial predictability.

  • Read: How to Manage the Cost of Your Home if You’re Laid Off

The Rise of Shared Living and Co-Housing Models

Another shift in homeownership trends can be seen in the rise of co-living and shared housing arrangements. As home prices and rents continue to climb, younger generations are opting for more communal living situations. Co-living spaces, where individuals share living areas and responsibilities, are on the rise, particularly in cities where housing is scarce and expensive. These arrangements allow people to live in desirable neighborhoods without the overwhelming cost of renting an entire apartment or buying a home.

Rethinking the Definition of Homeownership

Given the rapidly changing housing landscape, many are beginning to reconsider what “homeownership” means. Homeownership is no longer simply about owning a single-family house or apartment. As the cost of living rises, many are adopting alternative models of homeownership, such as fractional ownership or shared equity schemes, where multiple people collectively own a property and share both the costs and benefits.

Furthermore, technology is playing an increasing role in redefining how we view ownership. Some platforms now allow individuals to purchase shares in properties, enabling them to invest in real estate without shouldering the entire financial burden. These innovations are opening up new avenues for individuals to participate in the housing market without the need for a traditional, full-fledged property purchase.

The Future of Homeownership: Flexibility and Accessibility

As the cost of living continues to rise, the traditional notion of homeownership is evolving. With increasing financial barriers, more people are exploring options outside of traditional homeownership, including renting, co-living, fractional ownership, and new property investment models. For many, the focus has shifted from owning property as a symbol of success to finding affordable, flexible, and sustainable living arrangements.

In the future, it’s likely that the housing market will become more diverse, with multiple paths to homeownership and living arrangements tailored to different needs and budgets. The key will be finding solutions that offer financial flexibility, security, and accessibility for all, regardless of income level or location.  The ways we define “home” and the means by which we achieve it are shifting—and that may not be such a bad thing after all

Are you looking to enter the real estate market this spring? Give us a call today! One of the experienced agents at Zoocasa will be more than happy to help you through the exciting home-buying process! 

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Aiden Lowrie

Aiden Lowrie

A Zoocasa Content Marketing Assistant, Aiden Lowrie gets to blend her love of writing with her love of all things real estate and marketing as a blog contributor. She loves to find niche spots in and around the GTA to explore, or find ways to make the most out of your space. Outside of work and blogging, Aiden enjoys being outside in the sunshine, patios with friends and family, and working on her own blog. Connect with Aiden to read more of her articles and insights!

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