Though the housing market has made significant strides over the last year or so, many experts believe it will continue to improve in the short term. However, new data also shows that it could continue to do so decades into the future as well.
A combination of baby boomers aging into retirement, exploring more housing options as they live healthier post-career lives, and their children maturing into more secure financial standings as the effects of the recent recession fade, could encourage significant improvement in the national housing market through 2030, according to new data from the Bipartisan Policy Center, which is made up of former federal lawmakers and officials including ex-secretaries of the U.S. Department of Housing and Urban Development and retired U.S. Senators. For instance, boomers who are approaching their retirement age or have recently passed it now number some 78 million people, and many are expected to become interested in relocating in their post-career lives, which will lead to more home sales nationwide as they not only move into new properties but sell their old ones.
In addition, the children of baby boomers — known as millennials or echo boomers — may soon have the financial wherewithal to wade into the market for the first time in their lives, particularly as the older members of that generation gain stronger financial standing. There are roughly 62 million people in this age group nationwide, and it’s believed that before the decade ends, they will make up between 75 and 80 percent of all homeowners under the age of 65.
And in particular, it’s likely that as these potential buyers become interested in the market, they will turn to potentially less-expensive properties which are currently vacant, the report said. As those are scooped up, values will generally rise nationwide and therefore encourage more sellers to enter the market themselves, meeting demand. Overall, it’s believed that by 2030, the national homeownership rate will climb to as much as 60 percent.
The national average home value is expected to continue improving in the next year or more at least, as low interest rates persist in pulling more buyers into the market, which in turn encourages competition for a small number of properties and lures prospective sellers into listing their properties for sale.