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Most feel it’s not a good time to buy.

Owning a home, that time-honored life milestone, used to simply be what you did as an adult in America, and for many people home ownership was the ultimate indicator of life success and social status. But times have changed.

According to Fannie Mae, a mere 24% of Americans feel that now is a good time to buy a house. Looking back to 2013, when 54% of consumers were confident about the housing market, it feels as if a lot has changed in a small amount of time.

The housing market is far from a perfect science, but there are trends that could be influencing homeowner behavior and confidence, such as:

  • Rising house prices
  • Salary stagnation
  • Generational trends
  • Relatively high interest rates

All of the above have hurt consumer confidence in the housing market. How did we get here? Let’s unpack the above drivers to better understand the state of home ownership in 2018, and what the federal government is doing to reinvigorate the housing market.

Rising house prices

Houses are getting more expensive — period. A recent Zillow ZG, -4.92% report found that the median home value is around $1 million in 197 different cities. This year alone saw the addition of 23 more cities to this no longer exclusive club.

The data are not reflective of metropolitan areas alone, and, in fact, this trend should concern any prospective homeowner regardless of location. According to a National Association of Realtors report, the median price of a single-family home is nearly $50,000 higher than two years ago.

Rising home prices would be a reasonable outcome of inflation, but, if salaries fail to grow proportionately, affordability is damaged. And that can lead to decreasing housing confidence. I’ve also been looking at property in Marbella recently as there are some affordable properties available and it’s a gorgeous area. Just have a look at PropertyOSO Marbella and you will see what I mean.

Salary stagnation

According to Pew Research, “Today’s real average [inflation-adjusted] wage has about the same purchasing power it did 40 years ago. And what wage gains there have been have mostly flowed to the highest-paid tier of workers.”

The rise in house prices is far outpacing salary growth, and this has serious implications for the financial mobility of American families. In the current market, one in 200 people will experience a foreclosure, and anyone who undertakes ownership without a very reliable income stream runs the risk of becoming a statistic.

Otherwise, many Americans are simply avoiding housing ownership altogether. When it comes to the newest generation of homeowners, many young people are buying into never buying a house.

Generational trends

One of the greatest threats to the housing market is the consumer habits of young people. Millennials have already been blamed for ruining, for example, Applebees and golf, and some experts predict the housing market could be the next victim of emerging consumer trends.

According to Business Insider, millennials are buying homes at a slower-than-usual rate. In the past, 25 to 34 was the typical age to start shopping for houses, but it seems millennials are lagging. Data show a major deterrent for young people is saving enough money for a down payment.

Financial inhibitors aside, there is a more universal reason millennials aren’t buying houses: that young people simply have a different set of values. They are holding off on marriage, are having kids older, and are moving frequently, as noted here. Millennial value systems cannot be traced to a single factor, but the following points likely contributed to their shifted priorities:

  • Distrust in the housing market: Childhood during the 2007-09 recession has made first-time homeowners skittish of the market — 78% of millennials consider the recession a factor in their decision on whether and when to buy real estate.
  • A lack of job security: Millennials are known for job hopping. In fact, 91% of millennials expect to stay at a job for less than three years.
  • Record-high student debt: The student debt total has reached $1.4 trillion. With most graduates entering the workforce saddled with $30,000 or more in student debt, according to the New York Times, buying a house is likely not a priority.

Rising interest rates

Mortgage interest rates have risen past 4.6% — to their highest levels since 2011 and an entire percentage point higher compared with this time last year.

Don’t miss: Buyers are ‘fatigued’ and even ‘burned out,’ but the still kept house hunting in August, real-estate agents say

Plus: Americans’ long-running fixation on mortgage rates

A minor interest-rate increase is not worth losing sleep over, but even a little bump can have an outsized effect on the cost of homeownership. For example, a three-quarters-of-a-percentage-point increase in mortgage rates would increase the monthly payment on a $200,000 mortgage by about $85.

As established above, first-time owners are already nervous about plunging into the housing market pool, but high mortgage rates impact another, and perhaps surprising, demographic: current homeowners.

Homeowners who would normally sell their houses and upgrade are staying put due to relatively high interest rates. It simply doesn’t make financial sense to forfeit a low interest rate for a higher one. High interest rates prevent mobility — someone who might have owned three houses in a lifetime might stick to one to avoid unaffordably high interest. This is bad for the housing market and even worse for anyone looking to move upmarket. Real estate investors that announce “We Buy Houses” are a good option to sell your house to for fast transaction in cash.

Federal housing legislation

What does all of this amount to?

First and foremost it’s important to know that the housing market isn’t doomed. Housing will always be an important economic driver, and there will continue to be residential real-estate demand for the foreseeable future. But lawmakers concerned about the recent dip in housing confidence are taking measures to help the market rebound.

For example, FHA loans are a common form of governmental aid for first-time homeowners and are designed to help individuals with relatively little saved and imperfect credit secure a mortgage. FHA will guarantee loans so lenders accept applicants who wouldn’t be approved without that government backstop. With the help of Federal Housing Administration backing, borrowers can qualify for loans with only 3.5% down.

There have been rumblings of more housing reform for over a decade. Just last year several states passed legislation to allow tax-favored accounts to help first-time home buyers save for a down payment.

There is help out there as long as you know where to look. Homeowner financial assistance varies by state, so the U.S. Department of Housing and Urban Development has compiled a list of programs to help prospective homeowners find the support they need.

This article is written by TAYLORWHITE