In 2015, millennials will be biggest home buying group
2015 Predictions: U.S. rents will outpace home values by the end of the year; builders will begin constructing more, less expensive homes; millennials will overtake Generation X as the largest group of homebuyers; and homebuyers will have more negotiating power in 2015.
First-time homebuyers will be a critical part of the housing market next year, and certain markets will have more favorable conditions than others for buyers looking for that perfect entry-level home. Markets most favorable to first-time buyers are those with strong income growth among 23-34 year olds, significant growth in the number of entry-level homes on the market and home prices that won't take a big chunk out of buyers' paychecks.
Roughly 42 percent of millennials say they want to buy a home in the next one to five years, compared to just 31 percent of Generation X.
Home value appreciation will continue to cool down, from roughly 6 percent now to around 2.5 percent by the end of 2015. But rents will see no such slowdown, and will continue to grow around 3.5 percent annually throughout 2015. ■