Most first-time buyers say they plan to skip a starter home

Americans now expect to be 40 when they buy their first home
Majority of prospective buyers waiting for rates to fall further
More than 7 in 10 to use AI on path to home ownership

CHICAGO, April 22, 2026 /PRNewswire/ - According to the latest BMO Real Financial Progress Index, Americans have entered the "forever home" era—buying later in life, planning to buy once, and refusing to move until the numbers make sense. The survey also reveals recent interest rate cuts have failed to reignite buyer activity, leaving much of the U.S. housing market stuck in neutral despite strong interest in homeownership.

Nearly three in four Americans overall (74%) say owning a home remains a major life aspiration, but just 14% of non-homeowning Americans plan to purchase a home within the next year, down slightly from 17% in 2025.

Rate relief hasn't been enough to change behavior: a majority (51%) say they are waiting for borrowing costs to drop further before making a move. Only 17% of prospective buyers say they began house hunting because of recent rate cuts.

"The American dream of owning a home is still alive and well, even if the market is presenting challenges that require new financial strategies for many to achieve this dream," said Paul Dilda, Head of U.S. Consumer Strategy at BMO. "When prices and rates are high, your best offense is a good defense: a smart budget and a financial partner who can review your full financial picture to help you secure the best terms within your means so you can get those keys in hand."

What's the hold-up? One-and-done buying and multipurpose homes

The shift toward a "forever home" is closely tied to delayed homeownership. On average, Americans now expect to be 40 years old when they purchase their first home. By comparison, the average first‑time buyer was just 28 in the early 1990s, according to the National Association of Realtors – highlighting how dramatically the homeownership timeline has changed.

Many buyers are purchasing their first home only after starting a family. Two in five prospective homebuyers currently in the market have at least one child. 65% of buyers expect their first purchase to be their forever home, a view shared by 67% of house‑hunting Millennials.

Among Gen Z and Millennial homeowners, 52% believe their first home will also be their last. Meanwhile, 58% of non‑homeowners say buying a starter home and upgrading later simply "makes no sense these days," unchanged from last year. The online world appears to be a significant factor behind the decision to purchase early as well, with 55% of Gen Z homeowners saying they felt pressure from social media to buy a house.

"With more first-time homebuyers entering the market later in life, they are no longer looking for a starter home, but rather a house that matches their life stage and family needs," added Dilda.

Homes Built for More Than One Job

Because buyers expect to purchase just once, younger homeowners are prioritizing homes that can serve multiple purposes—supporting family, work and income generation:

Return of the in-law suite: With caregiving pressures rising, 54% of Millennials and 41% of Gen Z identify as part of the "sandwich generation." Two‑thirds (66%) of Millennial homeowners—and 75% of Gen Z homeowners—say it was important to buy a home that could eventually accommodate parents or grandparents.
Active housework, passive income: Sixty percent of Gen Z and Millennial homeowners plan to invest in additional space to generate rental income, either through long‑term tenants or short‑term rentals.

Caregiving, retirement and more: Obstacles on the path to homeownership

Despite strong interest in owning a home, 55% of non‑homeowners say buying feels unattainable in their lifetime.

That pessimism extends even to high earners. Nearly half (49%) of renters under 40 earning at least $100,000 a year say they are less confident they will ever own a home than they were five years ago.

Key pressures keeping buyers on the sidelines include:

Caregiving costs: Three‑quarters (76%) of Americans with caregiving responsibilities report anxiety about housing costs, compared with 60% of those without. Nearly seven in ten prioritize saving for childcare or education over buying a home.
Nest vs. nest egg: While 44% of prospective buyers would consider tapping retirement savings for a down payment, 52% of non‑homeowners say saving for retirement takes precedence over purchasing a home.
Insurance and climate concerns: More than half (56%) of Americans say rising home insurance costs and availability could affect their ability to buy or keep a home, while the same share say climate or natural disaster risks will influence where they choose to live.

Young buyers get creative

Faced with affordability challenges, many younger buyers are experimenting with new paths into homeownership:

Embrace the commute: 55% of prospective buyers would consider a 60-minute commute to afford a dream house, and 64% of Gen Z and 56% of Millennial buyers are willing to accept a long commute for their dream house.
Move to a Zoom town: More than eight in ten Gen Z (83%) and Millennials (87%) say they would relocate to a more affordable market if remote work allowed. Also, 65% of Gen Z buyers and 62% of Millennial buyers would be willing to move to a new state or country to afford a space.
Co-buy with a friend (or grandparent): Nearly half (49%) of prospective buyers would consider purchasing a home with friends or family, including 59% of Gen Z buyers planning to buy within the next two years. In parallel, 64% of Gen Z buyers and 47% Millennial buyers would lower housing expenses by bunking with grandparents or parents and making housing costs a family affair.
Ask AI: 72% of homebuyers say they will use AI in some capacity on their path to homeownership. Top three AI uses include learning about mortgage options and interest rates (38%), calculating how much to spend on a home comfortably (35%) and better understanding legal or regulatory requirements (32%).
The bank of Mom & Dad: 53% of current Gen Z and Millennial homeowners could not have purchased without assistance from family.

Making real financial progress on the path to homeownership

Regardless of where buyers are on their homeownership journey, BMO offers tools and guidance to help consumers prepare to close on that dream home:

Calculate costs and set a goal: To understand the cost of a forever home, BMO offers calculators to help customers estimate a number of housing expenses, including Mortgage Affordability, Mortgage Down Payment and Rent vs Own.
Build a budget and start saving: For those starting to save for their dream house, the BMO Real Financial Progress Hub digital resource allows customers to build a budget and easily access personal finance advice and guidance, as well as tools and resources to reach their own specific financial goals.
Take advantage of first-time homebuyer programs: In certain markets, first time homebuyers might be eligible for programs like the BMO Welcome Home Grant Program.
Meet with a financial specialist: Speaking with a professional can help prepare for life's major financial decisions. BMO clients can meet with our financial specialists to review their full financial picture and understand how to achieve home-buying goals.
Innovation can be a guide: Coming soon, the DollarGPS app gives users the equivalent of a navigation system, a powerful tool that can facilitate optimal financial decision-making.

To learn more about how BMO can help aspiring homeowners make real financial progress, visit https://www.bmo.com/us.

About the BMO Real Financial Progress Index

Launched in February 2021, the BMO Real Financial Progress Index is an indicator of how consumers feel about their personal finances and whether they are making financial progress. The survey aims to spark dialogue that will help consumers reach their financial goals and to humanize a topic that causes anxiety for many: money.

The research detailed in this document was conducted by Ipsos in the U.S. from February 17, 2026 to March 18, 2026. A sample of n=2,500 adults ages 18+ in the U.S. were collected via the Ipsos panel. Quotas and weighting were used to ensure the sample's composition reflects that of the American population according to census parameters. This survey has a credibility interval of +/- 2.4 per cent or 19 times out of 20, of what the results would have been had all American adults 18+ been surveyed.

About BMO Financial Group

BMO Financial Group is the eighth largest bank in North America by assets, with total assets of $1.5 trillion as of January 31, 2026. Serving clients for 200 years and counting, BMO is a diverse team of highly engaged employees providing a broad range of personal and commercial banking, wealth management, global markets and investment banking products and services to approximately 13 million clients across Canada, the United States, and in select markets globally. Driven by a single purpose, to Boldly Grow the Good in business and life, BMO is committed to driving positive change in the world, and making progress for a thriving economy, sustainable future, and stronger communities.

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Housing Market Shifts as Homebuyers Upsize to Forever Homes: BMO Real Financial Progress Index