millennials projected to drive up U.S. housing prices

Aging millennials projected to drive up U.S. housing prices

NEW YORK – May 3, 2019 – Becoming a homeowner is likely to get more costly and competitive over the next decade as millions more Americans enter the age range where people typically seek to buy their first home.

Nearly 45 million Americans will enter their mid-30s over the next 10 years, or 3.1 million more than in the last decade, according to an analysis by real estate information company Zillow.

That potential surge in would-be buyers could drive up demand, pushing prices higher, particularly in the more affordable end of the market. The trend could also mean higher costs for renters.

“If this coming wave of buyers have to compete fiercely for homes to purchase, that could drive up rent prices as well as home values,” says Skylar Olsen, Zillow’s director of economic research.

As it is, first-time buyers in many parts of the country have been struggling to find affordable homes amid a stubborn shortage of properties on the market that’s helped push prices higher.

Nationally, homes priced in the bottom third of the market, the tier most likely to be eyed by first-time buyers, have increased 57.3 percent in value over the past five years, according to Zillow. At the same time, the inventory of homes in this price range has fallen by 23.2 percent.

“The potential first-time buyer bulge, without inventory to meet it, suggests that the typical age of first-time buyers will continue to be pushed further and further out,” Olsen says.

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