While spring is springing and the snow is finally melting from most northern U.S. states, home buyers are out in droves searching for their next home — and for them, the forecast is good.
According to Realtor.com, even though there’s a real estate slowdown, the economist project that this year’s housing market will be busier than ever. In fact houses are garnering higher prices nationwide. The economic stability over the past few months and low unemployment rate has generated some home buyer power to most middle-class Americans. And first time home buyers may be looking for options as well due to the low mortgage rates staying around 4 percent.
Another good sign is that the housing stock is slightly up, meaning home buyers have more choice. Zillow found over the past few months from their data that more homes are cropping up for sale than this time last year. With buyers having more choosing power for their money and a stable job market, many may feel it’s the right time to buy a home.
Zillow also predicts that by 2028, more than 3.11 million millennials are going to enter the home buying market. This wave of first time home buyers could turn the market around, according to Zillow.
“From 2019 through 2028, 44.9 million people will turn 34, the median age of current first-time home buyers,” Zillow writes. “That’s an increase of 7.4 percent from the past 10 years, when 41.8 million people passed that threshold.”
Millennials currently account for one-fourth of the U.S. population and this shift of home buyers could spell a huge shift in home purchasing over the next decade. With this new wave of purchasers, house prices will climb again and sellers will see more demand for homes. The way things stand right now, rents will continue to climb, and millennials will look for other options to quell the cost of living.
“Younger generations’ persistence in the rental market will continue to put pressure on those markets despite all the new apartment building,” Zillow wrote. “This is a huge generation and the rate of multifamily building, as aggressive as it seems for anyone watching the skylines of urban areas, does not make up for years’ worth of shortfall when more capital was being directed to single-family building during the housing bubble.”
Particularly in metro areas, sellers are seeing a rise in millennial home buyers. Those who choose to live in cities make a bit more and may be willing to purchase a home instead of paying costly rent.
“Time will tell whether the potential ‘up-and-coming’ first-time home buyers buy homes at a similar rate as those who came before, or if they have to move to more affordable ground to make that happen,” Zillow wrote. “The life cycle of housing is intimately tied to the life cycles of our population. From this quick glance at the age distribution of the U.S. and major metro areas, what we do know is that challenges are ahead.”
Source: Zillow.com, Realtor.com