A recent survey by Bank of America reveals that many current renters might transition to homeownership within the next five years, posing significant challenges for local housing markets, particularly in areas with growing populations.
The 2024 Bank of America Homebuyer Insights Report highlights this potential shift, which could strain housing supply in regions already experiencing demographic changes.
Bank of America's internal data indicates that many cities in the Northeast and West saw population declines in the first quarter of 2024. In contrast, the South presented a more complex picture, with some metropolitan areas continuing to grow while others saw retrenchment.
This population movement has influenced housing supply, yet it's uncertain if the rental property market in the South can accommodate the increasing demand.
The survey points to an increased preference for suburban housing and suggests that current trends might persist, with significant population inflows expected in parts of Texas and Florida. This demographic shift is skewing towards younger individuals who are more inclined to rent.
However, the Homebuyer Insights Report indicates that many of these renters, especially from younger generations, plan to purchase homes within five years.
This anticipated shift from renting to buying means that key cities in the South will need to adapt their housing supply strategies to meet evolving demands. As these younger populations mature, the demand for homeownership is expected to rise, necessitating a reevaluation of housing policies and development plans to ensure sufficient supply and affordability.
