Looking to buy a home? It might be much harder than you think.

Record low interest rates from the Coronavirus pandemic has sent the nation’s real estate market into a frenzy. With low levels of homebuilding and many homeowners disinterested in selling after refinancing their mortgages with new low interest rates, the supply of homes is incredibly low.

High demand coupled with record low supply has created a crazy competitive market that makes it great for sellers and tough for buyers. The median price of a home has increased 16% from 2020, and even higher in other markets.

This market is good for the wealthy, and tough on young, first time home buyers. Large corporations and the wealthy are dominating the housing market, snagging up single family homes with all-cash offers. According to a report from Redfin, all-cash offers improve a buyer’s chance to win a bidding war by 290%.

With today’s hot market, a listed home will get so many offers that drive the price up and only allow for the most financially secure and cash rich buyers to purchase the home. These competitive offers are driving housing prices up and squeezing middle class millennials out of the market. This trend is turning America into a renter’s nation.

This large new market of institutional landlords of single family rentals is a relatively new phenomenon. Before 2010, these large corporations did not exist in this type of market, but now there are dozens of them. Blackstone subsidiary Invitation Homes owns over 80,000 single family rental units.

According to the Urban Institute, homeownership is down 8% among Millennials compared to previous generations at the same age, and that an estimate of 3.4 million more millennials would be homeowners had they kept up with previous generations. Millennials already struggle with high levels of student debt, lower income, and more expenses; so this current hyper-competitive market only adds fuel to the fire of the lack of millennial homeownership dumpster fire.

Billionaire John Paulson believes in the power of home ownership,

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With affordable homes out of reach for many younger Americans, renting will continue on the rise. Following this trend, many more Americans are missing out on the best opportunity to build substantial wealth.

A 2018 Federal Reserve study revealed that the net worth of a homeowner is 36 times greater than the net worth of a renter. As millennials are now aging and beginning to start families, it is crucial that the housing market climate is friendlier to first time buyers.

Robert Dietz, chief economist at the National Association of Homebuilders, believes that there needs to be changes in the home construction industry to keep up with the demand. Increasing lumber prices, strict zoning laws, costly permits, and a shortage of skilled labor prevent builders from building enough entry level homes and for the right cost.

As interest rates slowly begin to rise back to normal, some of the high demand may subside and ease the high prices. While many speculate that the country is going to experience another housing crash, experts generally disagree. Even if prices decline in some areas, mortgage underwriting has been strict recently and most homeowners are financially capable of the homes they are in.

The Coronavirus pandemic has introduced many changes to daily life. With much of work and school moving online, and people confined to their homes, living space has become a much more desired asset. With 75 million households not currently financially able to afford today’s median home price and rentership on the rise, homeownership is undoubtedly one of the nation’s most pressing challenges entering this decade.