Property Brothers Say In 20 Years, No Young Person Will Be Able To Afford A Home

The Property Brothers warned about the future of homeownership at CNBC’s Your Money event last Thursday. Jonathan Scott, one half the HGTV duo, projected that young people will be completely priced out of the housing market within two decades.

The chief issue stems from an ongoing housing shortage, which Drew Scott identified as the most important factor affecting today’s market. “I don’t think people realize this shortage of housing that we have affects everything – from the unhoused problem to the cost of housing,” Jonathan Scott told CNBC.

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Current market data supports their concerns. The National Association of Realtors reports a nationwide shortage of four million homes, while median sales prices reached $412,300 in the second quarter of this year, according to Federal Reserve data.

A growing disconnect between buyer expectations and market realities further complicates the situation. According to Freddie Mac, more than half prospective buyers are waiting for mortgage rates to drop to 5.5%, while current rates for a 30-year fixed mortgage are 6.54%. 

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The gap has contributed to existing home sales hitting their lowest point since October 2010, with sales dropping to an annual rate of 3.84 million units in September.

Though it represents a decline from the peak of $442,600 in late 2022, affordability remains a major hurdle for potential buyers.

The financial impact is particularly severe for first-time buyers, whose market share dropped to 26% in September, among the lowest levels on record. At current rates, a $400,000 home with a 20% down payment requires a monthly mortgage payment of $2,031, according to NAR’s deputy chief economist Jessica Lautz.

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However, some positive indicators have emerged. According to U.S. census data, September’s single-family housing starts increased 2.7% to 1,027,000 units. The market has also seen more sellers listing their properties as homeowners move past the “lock-in effect” created by pandemic-era low mortgage rates.

Despite the challenges, the Scott brothers maintain that homeownership remains a sound investment. CoreLogic data cited by CNBC reveals U.S. homeowners with mortgages hold over $17.6 trillion in equity as of the second quarter of this year, marking an 8% increase from the previous year.

The brothers suggest alternative approaches for those struggling to enter the market. “You have to think long-term,” Jonathan Scott noted, adding that prospective buyers might consider purchasing property with family members or friends to overcome affordability barriers.

Still, the current trajectory of housing costs, combined with persistent supply shortages, paints a concerning picture for future generations of potential homeowners.

Without serious changes to housing supply and accessibility, the Scott brothers’ prediction that young buyers will be priced out could become a reality.

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