For years, newly graduated students were stuck outside the housing market, with tremendous amounts of student debt and a weak job market. However, as more and more new graduates are finding better-paying jobs, they have begun to search for houses, but end up being disappointed. A shortage in the number of homes available to first time buyers has constrained the number of millennials able to move towards homeownership. These barriers will ultimately will reduce wealth accumulation for this generation of consumers entering the market for housing.
The current housing market sees the fewest homes available for sale on record. Due to the limited stock of housing, prices have increased rapidly beyond affordability for first-time buyers, even as they have seen their incomes increase.
There are multiple factors creating this shortage of homes. First, people are not moving, because it just too expensive, and their mortgage is worth more than their house. Further, home construction levels remain low as a result of the recession, and though they’re on the uptick, are still at unhealthy levels.
Read more from the Washington Post here.