Confidence in Market On The Rise Especially Among Renters
Post on: 3 Май, 2015 No Comment
Confidence in U.S. Housing Market On The Rise, Especially Among Renters
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SOURCE Zillow
More than 5 million renters say theyre likely to buy a home in the next year, according to the Zillow Housing Confidence Index (ZHCI)
-In the U.S. both renters and homeowners expressed more confidence in the housing market this year than last year.
-Americans are most confident in the housing market in San Jose, Miami and San Francisco. Over the last year, confidence rose the most in Dallas, Detroit and St. Louis.
-Homeowners remain more confident than renters, but renter confidence is growing faster than homeowner confidence in 14 of 20 metro areas surveyed.
SEATTLE. March 13, 2015 /PRNewswire/ — American renters are growing more confident in the housing market, and more than 5 million are planning to buy a home this year, according to the Zillow® Housing Confidence Index (ZHCI) i .
More than 12 percent of current renters nationwide – roughly 5.2 million – said they plan to buy in the next year ii. an almost 25 percent jump from the same time last year, when 4.2 million renters said they had plans to buy within 12 months. The ZHCI, sponsored by Zillow and developed by Pulsenomics LLC, polls homeowners and renters about housing market conditions, expectations for the future and their attitudes toward homeownership in general iii. across 20 of the large metro areas in the United States .
Thanks to historically low mortgage interest rates and home values below peak levels, buyers can expect to spend about 15 percent of their monthly income on a mortgage payment, compared to 22 percent historically, according to Zillow research iv. Typical renters should expect to pay 30 percent of their income to rent, compared to 25 percent a generation ago.
As home affordability continues to look great and rental affordability looks abysmal, many current renters clearly seem to be re-thinking their attitudes toward homeownership, and are expressing more confidence in the overall housing market as a result, said Zillow Chief Economist Dr. Stan Humphries. But while this confidence is heartening, its important to inject a note of reality here: Not all renters who want to buy this year will be successful. Saving a down payment, qualifying for a mortgage and finding an affordable home to buy all remain formidable challenges for many.
Among all renters surveyed nationwide, 59.7 percent said they think buying a home is the best long-term investment a person can make, compared to 56.9 percent at the same time last year. This improved long-term outlook was especially evident among younger renters. Among all 18- to 34-year-old renters, 66.2 percent said owning a home was the best long-term investment, compared to 61.4 percent last year.
The index is measured on a 100-point scale, with readings more than 50 indicating general confidence. Overall, housing market confidence is rising more quickly among renters than homeowners. Among only homeowners, headline confidence rose 3.7 points year-over-year, to 70.6 in January. Among renters only, overall confidence rose 4.4 points in the past year, to 62.4. Confidence among all owners and renters rose 3.6 points, to 67.4.
Although survey respondents in most markets said they expected home value appreciation to slow in 2015, in all areas they also said they expected home value growth to exceed the rate of inflation by an average of more than 2 percent. During the past year, consumer expectations for long-term home value growth have increased. Consumers now expect homes to appreciate over the next ten years by slightly more than what is expected by experts – and at a faster rate than before the housing bubble.
This latest increase in The U.S. Housing Confidence Index confirms that prevailing sentiments and expectations among consumers concerning their local real estate market–important economic factors not reflected in widely-followed consumer confidence indexes–continue to improve and bode well for the U.S. economy, said Terry Loebs. Founder of Pulsenomics. Renter aspirations for homeownership are on the rise in most cities. More homeowners are recognizing restoration and growth in the value of what for most of them is their largest asset by far–their home. In every market surveyed, both renters and homeowners expect the annual growth rate of local home values to handily beat the rate of inflation within the broader economy over the coming decade. These insights should remove any lingering doubt that the U.S. housing markets foundation is now solid enough to withstand The Feds monetary policy liftoff.