patrick.net

shows how the demographics are driving renters growth, most people in their 20s ain't going to be buying, so if they move out of their parents' place it's going to be in a van by the river or an apartment.

Logan Mohtashami says

Come 2020-2024

College educated Americans with dual incomes we will be buying more homes

plus there will be the beginning of the Boomer Die-Off, median boomer will be 65 in 2020, potentially freeing supply.

In California tho thanks to Prop 13/58 protection it'll make tons of sense to convert these properties into rentals.

Great job, Howard Jarvis.

Ages 17-29 are big

Ages 21-25 are the biggest in America

Come 2020-2024

Those who have graduated college, dual income family having kids will buy homes, just like that group is doing now

However, by that time frame, we will simply have more of them in the system as supply to own.

bob2356 says

You are going to have more supply of prime home buyer people those years? True. You are also going to have an unprecedented number of people selling houses because they are dying or gong to nursing homes. How do those numbers balance out?

More buyers and more sellers if that theory comes true.

I am only talking about the net demand buying curve. Inventory has it's own problem in terms of getting supply out there.

For this cycle as always, it's been a demand issue

Annual months of inventory:
Note we have never had 6 months AMI supply with the exception of the housing bubble burst years.
1999- 4.8 months
2000- 4.6 months
2001- 4.6 months
2002- 4.7 months
2003- 4.3 months
2004- 4.3 months
2005- 4.6 months
2006- 6.5 months
2007- 8.9 months
2008-10.4 months
2009- 8.8 months
2010- 9.4 months
2011- 8.3 months
2012- 5.9 months
2013- 4.9 months
2014- 5.2 months
2015 still over 5 months
Notice the 2006-2011 years that had major supply chain of homes
Sales started to fall... then we had the home buyer tax credit which juice the sales short term and then it fell again
And even today, with more inventory than the housing bubble years, adjusted to population sales are going to be down
-13% compared to the year 2000
- We had 40 million less Americans
- We had 18 million less Americans
- Rates were 8 % back then too

This is a Demand story...

For inventory economics

Also, if you follow the outdated affordability index

- Everyone has 20% down
- 740 Fico ( Less than 10% CC Debt to Balance)
- Starting DTI of 25%

cough cough water please...

This means you need at least 28%-33% equity to sell, pay transaction cost, and have 20% down to move up, without adding any cash into the equation

i want to say something but I don't eat meat on fridays....

bob2356 says

because they are dying or gong to nursing homes.