Most housing markets across the country are dealing with an oversupply of homes, according to Related Companies founder Stephen Ross.
The rental market, however, has remained very strong, as many young people find they prefer renting to buying, Ross told CNBC.
“I think that all goes back to the housing crisis when they saw what happened to their families, you know, in 2008, and the dislocation that occurred,” he said.
Millennials’ homeownership rate is lower than their parents and grandparents, and mortgage application volume dropped by 22 percent year over year.
Additionally, the average contract interest rate for 30-year fixed-rate mortgages has reached its highest point since 2010, and the housing industry appears set to see its worst trading year since the 2008 crisis.
“So those rising interest rates will certainly have an impact on the number of buyers and what they’re looking for and what they can afford,” Ross told CNBC. [CNBC] – Eddie Small