According to a new report from NerdWallet, about 50 percent of people who plan to buy a home in the next five years say they feel better about their prospects when compared with last year. The main reason for that is because they have more income.
Nearly 100 million Americans said they plan to purchase a home within the next five years, including 27 million in the next 12 months, indicating “radical optimism” this year and beyond.
Economic recovery gains after the 2008 recession had largely been made by those at the higher end of the income scale. But wage growth has begun to pick up among low-income workers.
Still, affordability remained a concern for many. Seventy-five percent of respondents said they believe it is more difficult to afford a home today than it was 25 years ago.
Low income was named as the main obstacle preventing would-be homeowners from making a purchase, followed by not having enough for a down payment.
But millennials are waiting for their moment to get in on the market. About 90 percent of people between the ages of 24 and 39 view home buying as a priority.
“There is colossal pent-up demand for homeownership, both among young people who are ready to pair up and start families, and those who see owning a home as the next step in adulthood,” Holden Lewis, NerdWallet home and mortgage expert, said in a statement. “According to estimates, roughly 6 million new and existing homes will be sold in 2020, and well-informed buyers will have the edge.”
As previously reported by FOX Business, homebuyers will continue to be constrained by a lack of inventory, particularly in the entry-level market. The total number of available homes for sale could even hit a record low, according to a forecast from Realtor.com.
So even for those who are able to afford a home, finding one they want to buy could prove challenging.
Another potential wildcard for homebuyers? The 2020 election. About one-in-four respondents said they would strongly reconsider, or stop looking altogether, if their preferred presidential candidate lost the 2020 election.