In the last 18 months, housing demand has significantly outpaced supply, and strong demand is likely to continue with the number of 35 to 44 year olds rising by 5mm over the next 8 years. Meanwhile, housing supply growth has been muted as construction was sluggish for years following the housing crisis. While this has pushed prices much higher, affordability isn't far from historical average and rentals have become more expensive too, such that buying makes more economic sense in many markets. Supply chain issues have made materials more expensive, but an easing of these issues could also help with affordability. And while rates are expected to rise next year, the increase will likely have a minimal impact of on the average mortgage payment and a less accommodative Fed could slow inflation, a positive.

"Bank of America" and “BofA Securities” are the marketing names for the global banking businesses and global markets businesses (which includes BofA Global Research) of Bank of America Corporation. Lending, derivatives, and other commercial banking activities are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., Member FDIC. Securities, trading, research, strategic advisory, and other investment banking and markets activities are performed globally by affiliates of Bank of America Corporation, including, in the United States, BofA Securities, Inc. a registered broker-dealer and Member of FINRA and SIPC, and, in other jurisdictions, by locally registered entities.

©2021 Bank of America Corporation. All rights reserved.