Fewer renters believe they’ll ever be able to a♛fford to buy a home—and with prices hitting record highs and mortgage rates rising again, it’s hard to argue with them. 

As of February, 38% of renters believed they will never be able to own a home, up from 27% in May and June 2023 according to surveys by online real estate company Redfin, released in a report Friday. The most rec🎃ent poll was carried out by Qualtrics and included 1,000 renters. 

The reason for the growing pessimism is simple: Monthly mortgage payments are surging as interest rates and prices rise. A separate report by Redfin released this week found the median monthly mortgage payment to buy a typical house hit $2,747 last week, the highest ever and an 11% increase from a year ago.

“Buying typically requires a sizable down payment and approval for a mortgage–things that are difficult for many people today, when the typical down payment is near $60,000 and mortgage payments are sky-high,” Redfin’s Chief Economist, Daryl Fairweather, wrote in a blog post. “The sheer expense of purchasing a home is causing the American Drea𒉰m of homeownership to lose some of its shine.” 

And there’s little relief on the horizon. The average rate offered for a 30-year mortgage rose to 6.88% this week according to Freddie Mac, ticking up toward the two-decade high of 7.79% it hit in October.Data this week showed inflation remained more stubborn than expected, which has fueled concerns in financial markets that the Federal Reserve will keep interest rates higher for longer, puttin✃g upward pressure on mortgage rates.

Prices are also rising as homeowners who secured low mortgage rates in past years remain reluctant to sell, leading to low for-sale inventories and stiff competition among buyers who can still afford payments. Home prices have been hitting record highs in recent months and as of January were 46% higher than before the pandemic according to the S&P CoreLogic Case-Shiller Home Price Index.