While many millennials have been forced back to live with families since the recession, Sløk believes that the trend may be reversing and could lead to an increase in housing demand. Moreover, the group of millennials are experiencing a recovery in employment, with the employment rate of people age 25 to 34 back to pre-crisis average, which will also help foster housing demand.
Many have opted to rent as the economy improved, but rental vacancy rates are now lower than pre-bubble average, suggesting that there is a shortage of rental space, which could drive up rent costs. Higher rents may be the necessary fillip for renters to become new homeowners in the coming years.
The average share of distressed sales among all home sales are now back down to 9%, compared to close to 40% in 2010. Additionally, foreclosure rates have receded to pre-crisis levels.
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Max Chen contributed to this article.