A new report from HousingWire shows that homeownership among Americans between the ages of 28 and 31 jumped from 27 percent to 47 percent just two years. Home buying has surged among younger Americans, and that’s an encouraging sign for the housing market – especially since homeownership levels haven’t yet fully recovered from the housing crash.
However, that’s not the whole story. Increasing demand from first-time home buyers could also put pressure on home prices if available inventory can’t keep up with the level of demand. Millennials are expected to buy 10 million homes over the next decade, and they will be competing with each other. The balance between new home buyers and new homes will be a key component of the real estate market.
If supply continues to lag behind, home prices will keep rising, which will build equity among current homeowners. However, that could cause affordability issues for aspiring homeowners. On the other hand, if supply increases, prices should moderate and lead to booming home sales. Either way, first-time home buyers will have a significant effect on the housing market in the coming years.