Baby boomers and millennials are part of a "triple threat" driving up prices in the housing market, according to the founder and executive of America’s largest owner of single-family homes.
"And as a result," he added, "the combination of the bulge of millennials coming through the system, people choosing to age in place, even more so because of COVID, and pulling forward of demand... on top of low construction for a decade, is forcing all prices up and will continue."
Mullen noted that he founded Pretium in 2012 when expectations were that millennials, as they aged, would want to form households in a "classic," single-family home. Instead, demographic changes took hold.
"When you look at the numbers with millennials forming households and aging in place, the average age of a person moving out of their single-family home used to be 60, 20 years ago," the CEO said. "It's now 74."
He believes that the only solution to bringing down soaring housing costs is to lower the number of buyers.
"The only answer in the near term to increased housing prices is a reduction in the people trying to buy," he said.
Mullen’s comments come on the heels of the release of the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) for May, which revealed that builder confidence in the market for newly-built single-family homes fell eight points to 69 -- the fifth straight month that builder sentiment has declined and the lowest reading since June 2020.