In 2017, the homeownership rate in the U.S. increased for the first time since 2004. Shifting demographics, along with loosening credit standards and rising wages are pushing more people to buy rather than rent.
This year, landlords are anticipating one of the largest influxes of new rental unit supply in 30 years, yet, the number of rental households has continued to go down, Realtor.com reports. “Landlords should start to take caution,” said Ralph McLaughlin, chief economist and founder of Veritas Urbis Economics, a consulting firm. “There’s going to be downward pressure on rents in the near future.” Millennials, on the verge of becoming the largest homebuying generation in the nation, are aging into their 30s, an age typically associated with buying a home and settling down.
Nonetheless, challenges remain. Rising interest rates this year and a tax bill that passed late last year that diminished the tax benefits of homeownership were expected to dampen demand for homes this year. The rate for a 30-year, fixed-rate mortgage hit 4.58 percent this week—the highest level since August 2013, according to data released by Freddie Mac on Thursday. Limited inventory and rising prices are also making it difficult for young people to buy their first homes, as they compete in fierce bidding wars and often lose out to downsizing baby boomers or investors able to pay cash or make large down payments.
