The rate of homeownership in Chinese cities increased from less than 20% in the 1980s to 82% in 2007. However, such a high rate mainly resulted from the welfare housing policy which was abolished in 1998. In recent years, it has become much more difficult to become a homeowner in China, particularly for the 1980s generation who neither could qualify for public rental housing units nor afford private houses for self–use in urban areas. The sharp hike in housing prices in the past few years in Chinese cities has made homeownership a great challenge to lower-income groups. The purpose of this paper is to discuss the challenges of promoting homeownership among young urban households. This paper also offers suggestions regarding sustainable housing provisions for them.