In recent years, Millennials have been considered absent from the real estate market – even taking flak at times for what some would consider a burden on the economy. 2015, however is expected to bring with it some surprises as they’re predicted to be the largest group of homebuyers. Recently, the experts over at Zillow came together to put together what they believe 2015 has in store for us, and a year full of Millennials is just the start.
According to research from Zillow, 42% of Generation Y members plan to buy a home in the next one to five years, 11% higher than Generation X – who’ve led the market’s recover till now. Not only are Millennials expected to overtake Gen X for most homebuyers next year, it’s also believed that Millennials will initiate two-thirds of all household formations over the next five years, which would greatly drive first-time buyer sales.
In addition to this, rent is expected to go up in 2015, but home value won’t match it. According to the forecast, you can expect rent to continue its ascent – growing by about 3.5% throughout the year. Home value appreciation, on the other hand, is expected to cool down next year, dropping to nearly 2.5% by the end of 2015. “As renters’ costs keep going up, I expect the allure of fixed mortgage payments and a more stable housing market will entice many more otherwise content renters into the housing market,” said Zillow’s chief economist Dr. Stan Humphries.
Furthermore, it’s expected that builders will start building more, less expensive homes. Contrary to what we’ve seen in recent years, builders are going to make a shift from building fewer, more expensive home to more, less expensive ones. This is partly due to an expected influx of millennial buyers and an increased demand for the lower end homes.
What do you think of Zillow’s predictions for 2015? Do you have any predictions of your own?