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With debt at a more manageable level and over a decade of adult life under their belts, Millennials are finally coming to the housing market with good credit scores in hand. But their newfound financial stability cannot conjure houses out of thin air. Millennials are ready to buy, but the current housing shortage means that competition for affordable housing is intense. And despite builders’ best efforts, production cannot keep up with demand due to the lack of labor and previous focus on the luxury homes. Before the Silver Tsunami returns houses to the market, Millennial demand will put pressure on both new home sales and the existing home market.
Home builders aren’t building enough for millennials.
That generation is expected to be the largest single cohort of homebuyers next year, but the nation’s homebuilders are not keeping up. This is already exacerbating the shortage of homes for sale and for rent nationwide, but will especially hurt affordability for millennials (those born between 1981 and 1997).
While the majority of both single- and multifamily home construction is in millennial-dense counties, it actually lags the rest of the nation when it comes to meeting demand. Millennial counties, defined as geographic areas where at least a quarter of the population consists of this demographic group, account for 62% of the entire U.S. population, but they account for just 59% of single-family homebuilding, according to the National Association of Home Builders’ Home Building Geography Index, or HBGI.
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