According to a survey from Realtor.com, the U.S. is in the midst of its worst housing inventory shortage in 20 years.
The real estate listing website has attributed this deficiency to two culprits based on data from an online survey of 1,054 randomly selected homeowners from across the country: Boomers are reluctant to sell their homes, and homeowners in general are satisfied with the ways in which their homes meet the needs of their families.
Looking at the surveys, Realtor.com saw generational trends play out in an interesting way between baby boomers and millennials.
Overall, 59 percent of the survey’s respondents revealed that they had no plans to sell their home next year, while 35 percent planned to sell (6 percent were unsure). Of those who planned to sell their homes, 60 percent are millennials looking to move somewhere bigger or nicer. This desire to move indicates that these first-time homebuyers most likely had to settle for less the first go-around due to a limited supply of starter homes.
Although it’s promising for the starter home market that these millennials are considering selling their first homes for an upgrade, whether they are successful or not depends on if they can find another home.
Which brings us to the boomer generation—85 percent of whom were surveyed had no plans to sell their home in the next year. This translates to about 33 million properties staying off the market, many of them city condos and suburban single-family homes—exactly the kinds of homes millennials are looking for.
And according to Realtor.com, boomers don’t have much of an incentive to move, given a strong economy, rising home prices, their satisfaction with the features of their current homes, and low interest rates. Even if they were to downsize, they would be met with the same shortages facing millennials.
One thing is clear: The rate of new construction has to catch up with job growth in order to address not only the general shortage of houses on the market but the dearth of affordable housing across the country.