Housing demand has been taking some hits lately with rising home prices, higher interest rates, lack of affordable inventory, and lingering student loan debt, but millennials may be the key to where it goes in the near future.
The tough conditions for buyers in the market that may be slowing demand have mostly been balanced by low unemployment and a strong economy, but recent numbers have shown that a market stalemate between these forces may be developing. CNBC ran a report this week that despite this, we may be on the edge of “an absolute perfect storm for demand” thanks to millenials, and they may be the force that tips the scales of home buying.
We wrote in our last blog about how the percentage of millenials who say they’re actively seeking to purchase a home is now exceeding generation X and the baby boomers, and although those two other generations are key to the housing market, the enormous numbers of the millennial generation represent a huge potential impact. Millennials have broadly been later to marry and have children, and similarly late to home ownership. Student loan debt is a part of that, but as the job market strengthens for them, and as they age and begin families, they’ve become a massive population who are saying loudly that they want to become homeowners too.
Household formation should continue to grow strongly over the next few years, according to the report, and we should be poised to see large numbers of people bolstering demand. It will continue to be a balancing act with the homebuilders though. Whether they can overcome labor shortages, and trade / tariff difficulties with raw materials, enough to keep up with demand remains to be seen.
What do you think? Will millennial demand outweigh any market slow down? How long will it be before we see their big numbers make an impact? Leave us a reply or ask us any questions you have below! And if you’re thinking of whether it’s a good time for you to buy or sell, let us talk to you about the ins and outs of the current market. Contact us today for any of your real estate needs!