Persistent tight supply of housing in many markets has led to stronger-than-normal price appreciation, Smoke notes. Existing-home prices rose a median of 6 percent over last year in September.
"The housing market outperformed the U.S. economy in the first half of the year, as growth in sales and prices was stronger than the growth in GDP," Smoke writes. "Housing outperformed because of ample demand from buyers who haven't yet been successful – buyers who just happen to be from the two largest generations in American history."
Millennials and baby boomers are reaching turning points in their lives. Millennials are getting married and starting families while baby boomers are looking toward retirement. Older millennials – aged 25 to 34 – are representing the largest buying age demographic in the housing market currently, according to the National Association of Realtors' 2016 Profile of Home Buyers and Sellers report.
"A stronger consumer outlook on top of historically high numbers of people turning 30 as well as 65 will provide the support for continued gains in the months ahead," Smoke says. "The key challenges will be continuing low levels of available homes for sale combined with navigating marginally higher mortgage rates."
Cited partly from an article by Jonathan Smoke on Realtor.com