1. Millennials will “drive two-thirds of household formations over the next five years." The cohort aged 22-25 are expected to start family formations which will lead to a change in housing types they are seeking.
2. Millennials will continue to demand housing in dense urban (expensive) areas. This is sort of contradictory to prediction one, because this will translate into apartment/condo living which will be affected by prediction 3 and prediction 4 mortage rates and their effect on home affordability.
3. Mortgage rates will rise. They said this last year, the economy worldwide will have to get on much better footing for this to happen, and if millennials are pursuing renting over buying banks will be looking to entice more people into borrowing.
4. Home Price increases expected to fall off, and home affordability will decline. This is dependent on mortgage rates rising, and how quickly the Fed wants to put the brakes on growth.
Read the full story at http://fortune.com/2014/12/09/housing-market-2015-predictions/