We're entering a brutal new era for the housing market

If you don't already own a home, you're going to be screwed for years to come

Attempting to time the housing market is a foolish pursuit. Sure, there are heaps of data, forecasts, and market experts who can offer theories on where home prices or borrowing rates are headed. But no amount of tea-leaf reading can spare you from this harsh reality: Homebuying is ultimately a coin toss. If you're very lucky, you buy a home right before prices boom. If you're not so fortunate, you pony up the cash just in time for the bubble to burst.

While these breaking points are nearly impossible to see in advance, they're often glaring in hindsight. Perhaps the most shocking "before and after" for the housing market in recent memory — the moment when the fortunes of homebuyers diverged, creating what one expert called a "housing economy of 'haves' and 'have-nots'" — came in July 2020. That's when it became clear that a wave of house-hungry millennials and space-starved remote workers were turning the housing market's initial pandemic slump into a full-blown frenzy.

The differences between those who bought homes before and after that turning point are staggering. People who got in before things went haywire were able to dodge skyrocketing home prices, lock in record-low mortgage rates, and stack hundreds of thousands of dollars in home equity over the past few years. Meanwhile, people left on the sidelines have watched their rent costs eat into their down-payment nest eggs, median home prices soar by 30%, mortgage rates shoot back up, and the pool of available homes shrink to the lowest levels in recent history.

The result is a housing market that's fundamentally out of whack. With each passing month, more millennials, and now Gen Zers, reach the points in their lives where they feel the urge to settle down and buy a home. Yet the number of available homes remains shockingly low, especially during what would normally be a busy spring selling season. On the horizon, there's no flood of new homes that could significantly ease the housing crunch. And homeowners have little incentive to move, since doing so would mean giving up the comfortably low mortgage rates that guarantee them manageable home payments for decades to come.