Millennials: The Driving Force Behind Soaring Housing Prices

Millennials, despite facing challenges in housing affordability, are expected to continue driving housing demand and household formations in the U.S. for the foreseeable future, according to an analysis by Ned Davis Research. With millions of millennials entering prime homebuying age, their demand for housing is helping to support the housing market and keep prices high. However, the housing market is also constrained by a shortage of available homes, with an estimated shortage of 2.1 million housing units. The lock-in effect, where low mortgage rates keep homeowners in their homes longer, further exacerbates the supply shortage. While homeownership is still highest among older age groups, millennials' demand is playing a significant role in the housing market dynamics.