A recent Zillow report tackles these questions with an interesting analysis. Zillow finds that homebuyer demand will continue to grow because of three primary external factors:
- Easy access to low cost mortgages. Record low interest rates have created a market where despite eye-popping home value appreciation, home “affordability” is comparable to that observed in February 2012, when home values were at their lowest post-Recession.
- The increase in Millennial households. The median age of first-time homebuyers was 34 in 2019. Over the next decade, 46 million U.S. residents will be turning 34—the largest such wave ever recorded over that period.
- The lack of housing supply on the market. In 2008 the over-supply caused by the Recession stopped most homebuilding over the next decade. In March, there were less than 1 million homes on the market nationwide, the 18th consecutive month that supply declined year over year.
With all this in mind, Zillow contends that strong and growing demand will likely keep the housing market trending toward growth and stability for the longer-term.