First-time buyers, inventory expected to rebound in 2024
Panel of housing experts sees pandemic-fueled deficits sticking around until then
- Panel expects a two-year climb back to pre-pandemic for-sale inventory levels
- Share of first-time buyers is forecast to stay below 2019 levels until 2024
- Home price appreciation should outstrip all inflation measures this year except that of energy
The dwindling supply of homes for sale has been a key driver of the recent explosion in
Inventory should return to a monthly average of 1.5 million units or higher in 2024, according to the largest group (38%) of respondents to Zillow's survey. But many are more optimistic — the second-largest group (36%) believes supply will bounce back to pre-pandemic levels in 2023, while 2025 earned the third-highest share of votes with 12%.
"Inventory and mortgage rates will determine how far and how fast home prices will rise this year and beyond," said Zillow senior economist
Return of the first-time home buyer
The pandemic ushered in record-breaking price growth alongside rent hikes that made saving for down payments even more difficult. As a result, the share of first-time home buyers dropped from 45% in 2019 to 37% in 2021, according to a Zillow survey of recent buyers.
First-time buyers should regain their pre-pandemic share of the market in a couple of years, according to the majority of experts polled, with 26% pointing to 2024, and 25% liking 2025. Eighteen percent of the experts polled did not believe the share of first-time buyers will rise above 45% until after 2030, despite millennials — the largest
Inflation considerations
Inflation has already begun eroding the bottom lines of American households, with the
Of the six categories considered, survey participants expect energy prices to increase the most over the course of 2022, followed by house prices, residential rents and food costs. Employee wages and stock prices were ranked fifth and sixth, respectively, rounding out the list.
Price growth projections
Pulsenomics founder
"Against the backdrop of tightening Fed policy and increasing mortgage rates, this more bullish outlook for home values suggests that home inventory shortages will remain the dominant price driver this year," Loebs said. "If price increases this year for homes, rents, energy, and food each exceed wage growth – as the panel expects – home affordability challenges will intensify further, especially for low- and moderate-income renters."
Zillow economists forecast a 16.3% rise in typical home values from February through December.
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