Young adults’ ‘wait-and-then-hurry-up” stage of household formation, family formation, and housing preference behavior is revving up.

Next year won’t be housing’s emancipating rebound we may have hoped for, but it’s also more than likely not going to be a stretch we’ll have reason to fear. For glass-half-empty types, 2017 housing measures will likely continue to underperform historical norm trends based on real demand plus pent-up demand. For the glass-half-full set, that solid and growing base of demand–and the big challenges to meet it–remain in the category of a champagne problem.

Of course, a big, honking unknown and possibly menacing variable is what the Federal Reserve does to rates for borrowed money, and how that flows through to mortgage interest rates. A positive-side plausible unknown is what could happen with household wage growth, particularly among younger adult households who need to shed college debt and get their noses above water to fully activate as a universe of housing demand. We’ll come back to this point below.

Otherwise, fundamentals will plod along, opportunity will concentrate in hotspot markets, constraints on housing supply–labor, lending, and lots–will retain their stubborn hold on development, and the somewhat-set template for continued moderate recovery across the residential new construction market will punch out a 2017 that bears a more than passing resemblance to this year and last.

For a thorough blast across the national bough of economic, demographic, geographic and business conditions forces in play, and their specific impact on housing starts, new home sales, and remodeling and home improvement expectations for 2017, have a look at the Metrostudy 4Q16 Housing Webcast, “Where Are We in the Housing Cycle?”

Metrostudy chief economist Mark Boud runs a clinic on statistical clarity and logical economic narrative. First, he deconstructs his own “model” of business assumptions and inputs one by one; then, he reassembles them into his projections for 2017. As a bonus, Metrostudy regional directors for the Mountain (John Covert) and Pacific Northwest (Todd Britsch) zero in on their respective regions for a deep-dive projection for what’s to come next in Denver, Salt Lake City (Eric Allen), Portland, and Seattle.

Among the noteworthy insights Boud extracts from his model is 1) that demand eclipses supply for as many as five more years, and 2) what that means for pricing. Here, Boud illustrates a demand-vs.-supply differential, and how that imbalance will net out to an almost 3 million home shortage–undersupply–by the end of next year.

Here’s the Boud forecast for housing starts in 2017 and 2018, a steady, glacial upward push to heights well below last-decade peaks.

For comparison’s sake, here’s a couple of other forecast estimates, this one spotlighting single-family starts expectations, from National Association of Home Builders chief economist Rob Dietz.

And here, the research team at Wells Fargo blends a series of real estate and trade group forecasts into a composite reading on how 2017 should play out for housing. By and large, everybody’s directionally in the same ball-park, with some perennially more optimistic than others.

Now, for a bit on the potential disruptors–to the bad and good–of these forecast assumptions. One is what happens, potentially as early as December, if and when the Federal Reserve executes its next step in tightening money supply by raising its Federal funds rates on borrowing costs. Here, Wells Fargo managing director and equity analyst for home builders Stephen East notes that the single biggest impactor of housing affordability is interest rates, not housing prices. He shows here that during the 2004 to 2006 housing boom run-up when prices were soaring, housing affordability as a function of the percentage of income a household would need to devote to monthly payments was much better then, than in the 1980 to 1983 period, when prices were not nearly as big a factor in affordability as abnormally high interest rates were.

On the other hand, another X Factor in predicting the level of housing demand has to do with household income trends, and the fact that they’ve stagnated for such a prolonged period of time.

The thinking here is that a “stealth” household income improvement trend may be emerging. The logic is this. More highly paid Baby Boom workers are retiring out of the labor force than early-in-their-career Millennials are moving into the workforce. Here’s a perspective on that from the ULI’s recent report, “Emerging Trends in Real Estate, 2017.”

The crossover point where more baby boomers are retiring than millennials entering the labor force is upon us. A Bureau of Labor Statistics (BLS) analysis released in December 2015 projected labor force change for the ten years ending 2024 as being only 0.5 percent per year. Emerging Trends has sketched the big picture in previous editions. The key change in the population cohorts from 2014 to 2024 looks like this: the number of Americans in the 25-to-34-years-old age group, the prime early-career working years, will be up by 3.2 million; meanwhile, the 65-to-74-years-old age group, those most likely to exit the labor force in retirement, will be up by 9.4 million.

Many organizations are having to accelerate compensation increases for younger associates, but they’re funding those increases by savings from attrition from among their older, higher-paid staffers.

So, that household income inertia we’ve been seeing, particularly among younger households, may be about to reflect a reality of resumed dynamic growth.

The “wait-and-then-hurry-up” stage of Millennial household formation, family formation, and housing preference behavior is about to redefine demand trends for the next five to 10 years.