Millennials looking to become first-time homebuyers and homeowners hoping to down-size to a smaller, more affordable house are flooding the affordable housing market, further straining its inventory.
The supply of homes valued in the bottom one-third on the market are down 20 percent year-over-year in the 31 biggest housing markets, whereas top- and middle-tier listings are down between 8 and 12 percent, reports John Burns Real Estate Consulting. Adam Artunian, Vice President of Consulting, attributes this to "the barbell of housing demand", with the two groups functioning as the dual weights on affordable housing supply.
Young family and move-down buyers actually have a lot in common: they typically don’t want (or need) large homes and are price conscious. Whether strapped with student debt or living on a fixed income, these buyers often opt for smaller, more affordable homes in a desirable location (close to employment and/or grandkids, good schools, etc.). As supply in the resale market continues to tighten, the need to provide new innovative housing solutions for these barbell buyer segments has perhaps never been greater.
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