Zillow says that the upcoming generation will outpace millennials for homeownership
The oldest millennials will turn 40 in 2020 with many still left on the sidelines of homeownership as rapid home price appreciation has shattered their dreams.
The homeownership rate is currently 64.8%, well below the 70% rate seen in 2004; but younger adults, the oldest of the Gen Zs, are set to increase the US homeownership rates as more favorable market conditions reboot the ability for young Americans to buy a home.
According to 38% of a panel of 100 experts and economists convened by Zillow and Pulsenomics, the homeownership rate among 35- to 44-year-olds should be somewhat higher in 2035.
Meanwhile, 31% said it will be somewhat lower than the current rate and 20% said it will be about the same.
Millennials have been hampered by high home prices, high levels of student debt, and parents who were unable to help with a down payment as their own home equity had been eroded by the recession.
"The uncertainty of housing experts is tied up in the fact that this past decade has been anything but normal," said Zillow Director of Economic Research Skylar Olsen. "When experiencing unfamiliar dynamics, we must ask whether we will eventually revert to historic patterns or if pillars like preferences, affordability, policy and technology have shifted sufficiently to make this the new normal.”
The panel of experts believes that US home prices will increase by an average of 2.8% during 2020, up from the 2.5% rate the panel projected for 2020 both last quarter and one year ago, but lower than the 3.6% growth expected for 2019.