A recent Bank of America study shows that many current renters could transition into homeownership over the next five years, creating significant challenges for local housing markets, especially in areas with growing populations.
Bank of America’s 2024 Homebuyer Insights report highlights this potential shift, which could lead to tighter housing supply in regions already experiencing demographic changes.
Bank of America internal data shows that many cities in the Northeast and West saw population declines in the first quarter of 2024. In contrast, the south saw a more complex picture, with some metropolitan areas continuing to grow while others experienced population decline.
This population shift has impacted housing supply, but it is unclear whether the rental property market in the South will be able to meet growing demand.
The study points to a growing preference for suburban housing and suggests current trends may continue, with significant population influx expected in parts of Texas and Florida. This demographic shift is toward younger people who are more likely to rent.
However, the Homebuyer Insights Report shows that many of these renters, especially younger generations, plan to purchase homes within five years.
The expected shift from renting to buying means key cities in the South will have to adapt their housing supply strategies to meet rising demand. As this younger population ages, demand for home ownership is expected to increase, requiring a re-evaluation of housing policies and development plans to ensure sufficient supply and affordability of housing.