Report: Housing is becoming an 'inherited advantage'

New data in Harvard University's State of the nation's Housing report suggests that homeownership is increasingly becoming "an inherited advantage" that is largely unaffordable to households without generational wealth. "Research cited alongside Harvard's report shows that children of homeowners often accumulate significantly greater housing wealth than children of renters, even after accounting for differences in income. Intergenerational transfers—including down payment assistance, gifted equity, and inherited property—are becoming increasingly influential in determining who becomes a homeowner."

According to an article in The Wealth Advisor, "Harvard identifies a combination of slowing household formation, weaker labor markets, declining consumer confidence, and mounting financial burdens on younger households as forces reshaping housing demand."

Long seen as a key source of wealth building for American families, access to homeownership is narrowing at an alarming rate. "The median existing single-family home now sells for nearly five times median household income, compared with ratios closer to three times income throughout much of the 1990s." Meanwhile, only a small share of renters earn enough to qualify for buying a home, and income from labor alone is becoming "less effective" at building wealth and helping families save toward homeownership.