Over the next ten years buying a home will become more competitive and costly as millions of Americans enter the age range where people usually buy their first home.
Skylar Olsen, who is the director of economic research at Zillow, had this to say about the matter;
"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."
Almost 45 million Americans will be entering their mid-30s within the next ten years. That could possibly raise the demand for homes, which could raise prices, even in the more affordable end of the market. This isn't good for renters either, as this could raise rent prices too.
Prices for homes are already on the rise, and this has made first-time home buyers struggle to find their first home. There also isn't a lot of options either, as we are seeing a shortage of houses being made.
From information Zillow has provided, around the United States, homes priced in the lower third of the market (the tier most likely to be looked at by first-time buyers) have increased 57.3 percent in value over the last five years. This also isn't good news considering what it has parralled, as those same homes in that price range have fallen 23.2 percent.
Thus, this could mean the average age of first-time home buyers will rise further until more homes are made, or prices are lowered.
The average age of first-time homebuyers is 34 years old (Zillow), and there are about 45 million Americans from the ages of 24 to 33 who will be turning 34 over the next decade. That's also 7.4 percent higher than the previous decade of 41.8 million Americans.
The Pew Research Center puts millennials between the years of 1981 through 1996. Their generation is larger than the previous two generations which has helped them cause a demographic surge. Many millennials have had to put off buying their first home as they get a grip on their student loans and rising rent prices. Which has made it more challenging to save for a downpayment, so now first-time homebuyers need to save up about a year and a half more than they did 30 years ago.
However, there is some possible light to shine on the subject. Many millennials are expected to be competitive about the home buying market, as they are getting married and having kids. We could potentially see a rise in home construction and babyboomers could start selling their homes as they look for retirement.