Across Chicago and much of the country, a growing slice of young adults is quietly stepping off the path to owning a home. That choice is already changing how they work, spend, and think about starting families, and researchers say that if it sticks, it could rewire local labor markets and widen wealth gaps over the long haul.
In a working paper, Seung Hyeong Lee and Younggeun Yoo project that people born in the 1990s will hit retirement with a homeownership rate about 9.6 percentage points lower than their parents' generation. They also find that roughly 15% of the 2010 cohort had effectively "given up" on ever buying by age 30. Using a calibrated life-cycle model and transaction-level data, the authors report that once people lose hope of owning, they tend to spend more, pull back on work, and lean into riskier investments.
Those findings have attracted national attention. As reported by The Washington Post, the model and county-level tests suggest that these behavioral shifts build on themselves over time and magnify wealth differences between would-be buyers who keep trying and those who walk away. The paper also cites a 2024 Harris Poll that found about 46% of Gen Z respondents agreed with the statement, “No matter how hard I work, I will never be able to afford a home I really love,” a result highlighted by Fortune. To bolster their case, the authors tested the model against transaction data covering more than 500,000 Americans.
Chicago readers have already gotten the local angle. Crain's Chicago Business summarized the research and reported that, in an email, the authors pushed back on the idea that discouraged renters are simply slacking off. They argued that what looks like apathy is mostly about affordability constraints, not personal failings. Crain's also noted that Lee and Yoo themselves have not given up on owning and that their paper lays out targeted policy ideas aimed at nudging on-the-fence renters back toward buying when it is realistically possible.
Affordability Is Getting Worse
National affordability metrics help explain why so many young people are opting out. The Federal Reserve Bank of Atlanta's Home Ownership Affordability Monitor shows that the share of median household income needed to buy the median-priced home has jumped sharply over the past decade. It climbed from the high 20s percent of income in 2015 to about 43% in October 2025, pushing typical ownership costs above the 30% affordability line commonly used by HUD, according to the Atlanta Fed. Both the paper and outside data suggest that squeeze is a major reason so many renters say they no longer see a realistic path to owning.
Local Market Pressure
Chicago's housing market has been feeling that squeeze up close. Recent reporting shows that median prices in the city and metro area climbed into the high $300,000s and touched about $400,000 in mid 2025, driven by tight inventory and steady demand, according to The Real Deal. In day-to-day terms, that means longer saving timelines and fewer truly affordable listings, which the authors warn makes it more likely younger Chicagoans will delay buying or skip it altogether.
Lee and Yoo suggest a narrowly targeted early subsidy for renters hovering near what they call the "giving-up" threshold. Their model indicates that such a policy could lift homeownership rates, increase work effort and reduce reliance on social safety nets, according to Lee and Yoo. Skeptics quoted in national coverage argue that subsidies on their own will not fix what is fundamentally a supply problem, and that cities will also need more housing and faster approvals to keep prices from marching even higher, as The Washington Post reported. For Chicago officials and community groups, the takeaway is blunt: reversing the trend of young adults giving up on buying will require both targeted demand-side help and serious efforts to expand supply.
