A new survey shows that when renters buy a home, it will likely be a lifestyle change that motivates them – either getting married, starting a family or retiring. And according to one economist, as Millennial marriages and pregnancies rise in 2018, it should equal a rise in housing demand as well.
According to the Housing Opportunities and Market Experience survey from the National Association of Realtors, 32 percent of non-homeowners said a lifestyle change would be their motivation for buying a home down the line.
More marriage, more housing.
Thanks to Millennials – and this very sentiment, NAR's Chief Economist Lawrence Yun said housing demand may spike in 2018.
“Housing demand in 2018 will be fueled by more Millennials finally deciding to marry and have kids and the expectations that solid job growth and the strengthening economy will push incomes higher,” Yun said.
The continuing dearth of housing inventory could pose a problem, though.
“With prices and mortgage rates also expected to increase, affordability pressures will persist,” Yun said. “That is why it is critical for much of the country to start seeing a significant hike in new and existing housing supply. Otherwise, many would-be first-time buyers will be forced to continue renting and not reach their dream of being a homeowner.”
According to the survey, just over half of non-owners said they couldn’t buy a home because of finances.
Fortunately, there are signs inventory levels might be improving. In January, RE/MAX CEO Adam Contos predicted a good year for homebuilding and existing home sales.
Could relief be on the horizon?
In December, Realtor.com forecasted housing shortages would ease up in several major markets.
"People are going to continue to seek out pockets of affordability that remain in the market," says Danielle Hale, chief economist of realtor.com. "A lot of these places are more affordable than surrounding areas, yet still have strong economies. Even though prices are expected to grow, most of these markets will still remain relatively affordable in 2018.”
**infographic courtesy of Realtor.com