This year could be the best year for home sales and new home construction since 2007, according to Freddie Mac's U.S. Economic and Housing Market Outlook for March.
The government-sponsored enterprise says an improving job market is starting to bring more millennials into the labor force. In addition, as rents continue to rise, it will cause many of these young people to re-assess whether they want to own a home.
The company points to U.S. Department of Labor statistics showing that 76.8% of people aged 25 to 34 were employed as of February, up from 75.9% in February 2014.
Meanwhile, rents increased an average of 3.6% in 2014 and nearly 11% over the last three years.
The big unknown is mortgage rates: If they increase significantly during the year, it could, in turn, dissuade many young people from pursuing homeownership.
‘This month kicks off the spring home buying season,’ says Len Kiefer, deputy chief economist for Freddie Mac, in a statement. ‘Between now and the end of June, we'll see about 40 percent of all home sales for the year. So, these next few months will essentially tell us whether or not 2015 will be a good or bad year for housing markets.
‘Overall, we're feeling good about housing, and we expect this year to be the best year for home sales and new home construction since 2007, when we saw total home sales [at] about 5.8 million for the year,’ Kiefer says.