With home inventories across the country hitting historic lows, and home prices increasing in many markets, sellers have been having a great time as they have been able to capitalize on the demand.
They have been able to sell their homes pretty quick, even during “slow seasons” like through the holidays, and are making record profits.
Is Change Coming?
Many news outlets and housing experts have been speculating that the housing market could slow down. The idea is that with prices rising so much, eventually, things are going to have to level out. Some are even predicting a more radical change, more like the bubble that burst a little over 10 years ago.
It is likely that the market will shift. Especially with mortgage rates on the rise.
New Buyers on the Market
However, it’s important to note that there is a very important factor here that is changing the market. Millennial buyers are steadily entering the market as they ditch the renter lifestyle and start to establish more permanent households. They are getting married, having children, and looking at putting down roots.
It’s also safe to say that they are just plain tired of living in homes they do not own and paying someone else’s rent. They still see homeownership as a good financial investment, that owning a home makes sense from a financial standpoint.
The Dream is Still Going Strong
The idea of homeownership being part of the American Dream has not seemed to fizzle at all. In fact, according to a recent report from the Census Bureau, buyers under the age of 35 are already out-buying older Americans. Homeownership rates were in a steady decline until 2016 when millennial homebuyers reversed it.
Last year, more than half of Fannie Mae and Freddie Mac mortgages were to these first-time buyers. As millennials age and have the means to buy, they continue to drive the market.
Even though there is some uncertainty on how the real estate market will continue to perform, this belief in homeownership among millennials is a good indication that things will continue to move up.
If you’re concerned that the demand will slow, it’s important to remember that the dream of homeownership and the belief of owning property as an investment will continue to move the market.