Today’s housing market poses significant challenges for Millennials, who have faced economic setbacks such as massive student loans, the Great Recession, and a high cost of living relative to their earnings. To make matters worse, a housing shortage exacerbated by Baby Boomers is hindering the ability of Millennials to enter the for-sale market, Fortune reports.
An overlap between Boomers downsizing and Millennials entering the market for similarly priced and sized homes is driving up competition between buyer demographics, and Boomers are winning. While Boomers can tap into home equity to make competitive offers, Millennials, especially those still renting, struggle to match their bids.
Recently a bit less pessimistic, Ameriprise Financial finds that about six out of 10 millennials are feeling good about finances, which likely is because 78% are relying on some help from their families in getting by. Things aren’t looking up for millennials though, as [Ali] Wolf explains that those who are renting “shouldn’t expect the market to get much easier in the near-term” as supply is still limited and there are buyers who are less sensitive to gouged prices. A recession could turn it around, but Wolf notes that doesn’t change the fact that building affordable housing with a vast buyer pool is increasingly difficult. While the housing market might cool, “buying an entry-level home will likely remain a challenge for home shoppers for the foreseeable future,” she adds.