The quintessential American dream is to become a homeowner. For generations, it\u2019s been seen as a symbol of economic stability and a beacon for building wealth.<\/p>\n
But with mortgage rates<\/a> and home prices<\/a> remaining elevated over the past several years, that\u2019s blocked many would-be homeowners from breaking into the housing market. The number of first-time home buyers in the U.S. is abysmal<\/a>: in 2004, the number of first-time homebuyers was nearly 3.2 million, according to NAR data shared with Fortune on Tuesday. By 2024, that number had plummeted to just 1.14 million.<\/p>\n The roadblocks of buying a home are essentially a chicken-and-egg situation. Older generations who bought homes decades ago\u2014and who would typically be ready to downsize by now\u2014aren\u2019t budging<\/a> out of fear of relatively high mortgage rates. Mortgage rates were sub-3% during the pandemic, peaked at 8%<\/a> in October 2023, and currently hover near 7%. And since that supply isn\u2019t on the market, home prices are higher, preventing younger generations from being able to buy a home.\u00a0<\/p>\n Plus, many Americans own their home outright\u2014meaning they don\u2019t have a mortgage payment. That\u2019s good news for them, considering it\u2019s unlikely mortgage rates will drop anytime soon, but dismal news for people trying to break into the housing market.\u00a0<\/p>\n The share of homeowners who don\u2019t have a mortgage payment rose to 40% in 2023, up from 33% in 2010, which reflects a trend toward outright homeownership and conservative borrowing, according to a Goldman Sachs note published Tuesday.\u00a0Assuming there are 86 million homeowners<\/a> in the U.S., that means more than 30 million don\u2019t have a mortgage.<\/p>\n Meanwhile, the housing market is particularly vulnerable for homeowners who just recently bought.\u00a0<\/p>\n \u201cWe\u2019re seeing early signs of risk building within specific markets and within specific borrower populations, like borrowers with limited equity or who are behind on student loans,\u201d Tim Bowler, president of ICE Mortgage Technology, said in a statement<\/a>.<\/p>\n People aren\u2019t borrowing against their homes because rates are too high\u2014and therefore risky<\/p>\n Meanwhile, U.S. mortgage borrowers have $11.5 trillion of tappable home equity<\/a> in their properties, according to ICE Mortgage Technology<\/a>. But their preference to tap into their equity has been more muted than between 2001 and 2008 because it appears borrower demand for expensive and riskier debt has shifted following the Global Financial Crisis (GFC), according to Goldman Sachs.\u00a0<\/p>\n \u201cRather, borrowers have focused on paying down their mortgages and owning their homes outright,\u201d wrote Goldman Sachs analyst Arun Manohar. That\u2019s because borrowers are more averse to riskier debt products (those with a higher interest rate) like home equity lines of credit (HELOC)<\/p>\n Manohar did not respond to Fortune\u2019s request for additional comment.\u00a0<\/p>\n