MBA warns demographic shifts could push US home prices lower

The Mortgage Bankers Association says US home prices could fall in the medium term as demographic trends reshape supply and demand. The group projects prices will rise about 1% this year and remain roughly flat over the next two years, but warned that if construction stays elevated, supply growth could outpace demand and push prices lower.

Researchers pointed to several forces they say are "weakening the foundations of housing demand." Fertility is projected to decline to 1.56 births per woman over the next decade from 1.6 last year, and deaths are now expected to exceed births annually by 2030. Gen Z is smaller than the millennial and baby-boomer cohorts, younger Americans have pulled back from homeownership amid affordability pressures, and net international migration fell to 1.3 million as of July last year from 2.7 million the prior year.

On the supply side, the MBA highlighted that baby boomers will likely free up homes as they age, citing one report that estimates an extra 250,000 housing units a year in the decade after 2025.

United States

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