Since the end of the recession, millennials have been moving out of theirparents' basements and renting, but now they too want tobuy, First American Financial Corp.'s chief economist MarkFleming tells GlobeSt.com. In a recent report from the firm,Fleming says as more and more millennials marry and have children —among the strongest determinants for the desire to be a homeowner —demand for housing will remain robust.

Fleming adds that while the housing market faces a dilemma thatis restricting the inventory of homes for sale thanks to theincreasing cost to finance a mortgage, wage growth has been at 2.5%over the past 12 months, and unemployment at its lowest level sinceMay 2001. This means that economic conditions that favor millennialhousehold formation will continue to drive strong demand, despitedecreasing affordability.

Fleming says there is evidence that millennial householdformation is on the rise. “The data on household formation hasshown a significant amount of growth in new rental-householdformation since the end of the recession, while there has beenbarely any growth (until just recently) in new owner households(see the chart below). Since the end of the recession, millennialshave been moving out of their parents' basements and renting, butnow they too want to buy.”