Millennial Housing Boom Ahead?
“There’s a couple of really good things going on for housing.” That’s what Collingwood Chairman, Tim Rood told CNBC’s Street Signs Tuesday. Despite recent reports of the lowest home ownership rate since 1993 in the fourth quarter of 2014, the former Fannie Mae executive is optimistic on the future of the housing market and the prospects for millennials.
Rood mentions two things that are compelling arguments for the future growth of the housing market. First, in the next few years, millennials should benefit from a workforce that has more people leaving the market (retiring) than entering the market which should put upward pressure on wages. He said that, The size of the job market is supposed to peak in terms of number of employees somewhere around 2016 then it drops off the face of the earth and what that does is it creates the opportunity for these millennials, who by that time will be in their late 20s, it gives them some earning power, it gives them an opportunity to raise the amount that they make.”
The second trend that should help millennials is that boomers are moving into the cities at higher rates. Rood explains that, “We keep thinking about these boomers that are retiring, that they are going to the sunbelt, they’re not! They are actually going to the cities where the millennials actually live today. You could find yourself having these millennials starting families at the end of this decade, the just at a time when the boomers are retiring and going to the city, so its almost a swap”
Our Feb 2015 Mortgage Industry Survey highlights the real estate and mortgage industry optimism for the future with roughly 80% of respondents indicating business conditions are expected to improve over the next six months. Click here to download the complete report: