Part 5/15:
Demographics, Affordability, and the Dilution of Homeownership
A critical focus is on demographic shifts. Melody highlights the declining homeownership rate among younger generations, notably Millennials and Gen Z, who are loaded with debt and facing unprecedented affordability barriers. The 2000s and 2010s saw reduced household income growth relative to housing prices, leaving many younger Americans priced out of homeownership entirely.
This demographic trajectory, combined with reduced birth rates and the exit of baby boomers passing down properties, creates a surplus of inventory that will intensify, further depressing prices. Melodies points out that young people are increasingly opting for smaller families or remaining rent-based due to economic constraints.