Is a single-family home the new luxury item?

As finances and bad credit prevents homeownership for many, a single-family home may soon be considered a luxury item.

Almost half of those people who don't own a home said their financial situation is standing in the way, according to a report by Bankrate.com released Tuesday. Additionally, 29 percent said they can't afford a down payment and 16 percent said their credit isn't good enough to qualify for a mortgage.

Slightly more than one-third, or 35 percent, of those on the sidelines said they don't own a home, because they simply don't want to.

A real estate agent places an Open House sign outside a property in Cambridge, MA.
Lane Turner | The Boston Globe | Getty Images

The housing crisis at the heart of the Great Recession may have left many would-be buyers gun-shy, suggested Crissinda Ponder, Bankrate.com's mortgage analyst.

"A lot of people could be feeling traumatized by what happened to the housing market and are counting themselves out," she said.

Despite mortgage rates near the lowest levels ever, housing prices are also still sky high in many parts of the country, making affordability an issue for many potential homeowners.

In addition, low inventory has made the competition stiff for entry-level homes, noted Zillow's chief economist, Svenja Gudell.

These days, first-time homebuyers, who are primarily in their 30s, are spending a bigger chunk of their incomes to buy their first house — coughing up about 2.6 times their annual pay; in the 1970s, first-time homebuyers purchased homes that cost only about 1.7 times their yearly salary, according to Zillow.

Tighter lending standards and hefty down payments have further deterred some buyers.

The majority of non-homeowners polled said they did not know how much money would be required for a down payment on a hypothetical home purchase, according to Bankrate. And although most buyers typically put 20 percent down, it is possible to get an FHA loan with just 3.5 percent or a conventional loan with as little as 3 percent down.

As a result, rental occupancy is at the highest level in 30 years and homeownership, which peaked in 2005, is at the lowest level in half a century.

Millennials, more than those in other generations, were most likely to say they don't want to own a home right now. Because of their hefty financial obligations, such as student debt, they are also postponing getting married and starting a family, according to a separate survey by TD Ameritrade, which polled 1,000 adults age 18 and older.

Forty-eight percent of those polled said their financial constraints prompted them to delay buying a house, while 38 percent said they put off having children and 29 percent said they postponed getting married.

It's not surprising that a lot of millennials aren't interested in homeownership yet, added Jason van den Brand, co-founder and CEO of Lenda, a mortgage and home loan refinancing site.

"Renting gives you a lot more freedom," he said. "You might not have that much flexibility with cash flow if you have that mortgage commitment."

Especially for those saddled with student loan debt, van den Brand said, "which makes your ability to save [for a down payment] pretty tough."

For middle-aged Americans, the story is much the same. More than 40 percent of those between the ages of 30 and 49 do not own a home, according to Bankrate. Of those, 31 percent said it was because they could not afford a down payment and 20 percent said bad credit prevented them from getting a mortgage.

"A lot of those folks could have been impacted by the foreclosure crisis and their credit may have taken a hit, Zillow's Gudell noted.

But, he added, as the economy continues to improve, boosting employment and wage growth along the way, "hopefully those people, too, will be incentivized to enter the market again."