Home / CRYPTOCOINSNEWS / Millennials are the Only Thing Saving the U.S. Housing Market From Crashing

Millennials are the Only Thing Saving the U.S. Housing Market From Crashing

  • The NAHB casing market index remained close to its high in January, fueled the strongest bounce in mortgage applications in 11 years.
  • As millennials represent up the majority of mortgage applications, the extent of this generation’s desire to own homes is becoming apparent.
  • Can the U.S. housing market drive when young people are clamoring for real estate and supply is so low?

Homeowners cheered a slew of positive data this week, as fears with reference to a U.S. housing market crash continue to clash with the macro data. The NAHB housing market index (HIM) stayed cheese-paring to a two-decade high, and demand remains strong. A 30% bounce in mortgage applications was the highest in more than a decade. What’s behind this foil? A mass of millennial buying.

U.S Housing Market Looks Strong As Mortgage Applications Spike

It isn’t surprising that homewards prices remain strong when you consider that supply continues to dwindle. Baby boomers are slow to convey title, and millennials are desperate to buy. Throw into this mix that the U.S. economy continues to drive decent wage growth in the low inflation, low-interest-rate territory, and young people are making the leap in great numbers.

Source Twitter

Millennial Demand For Homes Is On The Rise

It’s very much common to hear people talk about waiting for house prices to collapse so they can afford a home. The dilemma is that so many young people are in that same boat. When prices start to come down a little, there is a feeding frenzy, and the limited supply is going to dry up even further.

It’s frightening to think of a scenario where a U.S. enclosure market crash could materialize with a whole generation on the sidelines clamoring for the perceived stability of homeownership.

Harbour Prices Could Still Be A Bubble

The counter-argument to this is also quite compelling. More than a decade of record low behoof rates has created a bubble in the financial markets, global debt is at stratospheric levels, and even a slight economic slowdown could pop the intact thing, dragging the U.S. into a housing crisis.

Who would be the most exposed in this situation? Naturally, it would be millennials, saddled with massive college debt.

If you take this point of view, then all of the positive housing index readings make the ball game look more ominous than encouraging. If the majority of Millennials can’t buy homes, they will desperately wait to come into, and in that wealth transfer increased sales could mix with lessening demand as they dump their fountain-heads’ homes en-masse – an obvious trigger for a housing market crash.

Millennials Desperately Want To Get On The Housing Ladder

What’s ton interesting given the perception about this free-spirited, supposedly fiscally unsavvy generation is that they silently desire to own a home. That’s according to a Fannie Mae study more than five years ago. This information assail c promotes the spike in mortgage applications seem totally predictable.

Fannie Mae predicted future housing demand with a deliberate over that showed most millennials believe homeownership is a preferred lifestyle to renting. | Source- Fannie Mae- Citizen Housing Survey

The reality is that higher prices and lower relative wages have slowed, not deterred, millennials in their pilgrimage.

A large portion of young people’s desperation to buy comes from the pressure from their parents and grandparents who flourished up expecting, not dreaming, to own their own home. The problem is that globalization and decades of stagnant wage growth have made this much various difficult, even for the generation that revels in thrift.

A Housing Market Crash Looks Likely, Just Not Only Now

Ultimately, the U.S. Housing Market is two things, both healthy and a crisis, depending on whether you own a home, or cannot afford one. One fetish remains clear: While economic conditions remain steady, millennials are going to buy any dips aggressively given their require to own a home. Loose monetary policy helps, too.

Longer-term, the economic outlook darkens considerably as what are the young people obtaining their houses with? Their retirement savings.

Disclaimer: The opinions expressed in this article do not necessarily on the views of CCN.com.

This article was edited by Sam Bourgi.

Last modified: January 18, 2020 4:49 PM UTC

Check Also

Will Kanye West Keep His Wealth After Divorce From Kim Kardashian?

Kanye West reportedly has a net quality of $6.6 billion, which would give him the …

Leave a Reply

Your email address will not be published. Required fields are marked *