Mortgage Rates

“We’re seeing increased interest from renters in homeownership,” Humphries said. “That’s going to coincide, more than likely, with increasing mortgage rates as the Fed gets ready to probably increase the target rate this summer.”

The central bank said last week it would consider raising the benchmark rate as early as June and dropped from its statement a pledge that it would be “patient” on the timing of its first increase since 2006. The Fed’s stimulus has kept home- loan costs near historic lows.

Effective apartment rents, or what tenants paid after any landlord incentives, jumped 4.6 percent in the fourth quarter from a year earlier, a pace that will be repeated for the first quarter, according to Greg Willett, vice president of MPF Research, a Carrollton, Texas-based apartment-data firm. Leasing costs have climbed from a year earlier in every quarter since 2010, he said.

Job Market

Demographics and the strength of the job market will probably be the biggest drivers of home sales for millennials, according to Willett. The unemployment rate for adults ages 25 to 34 fell to 5.4 percent in February from a high of 10.6 percent in October 2009, Labor Department figures show.

The U.S. has about 75 million millennials -- people born from 1980 and 1995 -- a cohort expected this year to surpass the baby boom generation in absolute numbers as immigrants swell the younger group and boomers die off, according to a January report by the Pew Research Center.

“We’re just now hitting the point that the oldest of millennials are in their early 30s, which would be about time for them to make those moves,” Willett said. “The question is, do they have money for a down payment?”

Income Gap

Young people are getting squeezed because the gap between rents and incomes is widening to an unsustainable level in many areas of the country, according to a study this month from the National Association of Realtors. In the past five years, the typical rent jumped 15 percent, while the income of renters increased by just 11 percent.