SEATTLE, Nov. 30, 2015 /PRNewswire/ -- Deteriorating
housing affordability will drive 2016 housing trends. A lack of
affordable homes near city centers will push new and first-time
homebuyers to suburbs that feel like walkable, amenity-rich
mini-cities. Rising rents will force more young renters to wait
longer before buying a home. And the looming threat of rising
mortgage interest rates will slowly erode some of the terrific
mortgage affordability the market has enjoyed for the past few
years.
Zillow's 2016 Housing Market Predictions
- The median age of first-time buyers will reach new highs in
2016 as millennials put off homeownership and other major life
decisions.
- Growth in home values will outpace incomes, especially for
low-income Americans. In 2016, those whose incomes fall in the
bottom third of all incomes will be priced out of
homeownership and unable to afford even the least expensive
homes on the market.
- Rising rents won't let up in 2016, and will continue to set new
records. The next year will bring the least affordable median
rents ever.
- As affordable housing close to city centers grows increasingly
scarce, people will move farther out. Dense, walkable suburbs with
an urban feel – especially those that offer good access to the city
– will be 2016's new hot spots.
- The median expectation of more than 100 economic and housing
experts surveyed in the latest Zillow® Home Price Expectations
Survey1 was for home values to grow about 3.5
percent in 2016.
Statement from Zillow Chief Economist Dr. Svenja Gudell:
"Rents will continue to increase at a brisk rate in 2016, but
many potential first-time buyers are living in hot markets where
buying a home is really expensive. In 2016, we'll start to see more
people in hot coastal markets forced to move farther from the core
of the city to find housing. When they get there, they'll be
looking for amenity-rich suburbs – mini-cities, with walkable cores
and an urban feel.
"As renters gradually transition into homeowners, the
historically low homeownership rate should stop falling quite as
quickly as it has been. However, the median age of first-time
homebuyers – already the highest it has ever been at about 33 –
will climb higher. Millennials want to buy, but they are waiting
longer than previous generations.
"All of this will happen against a backdrop of slowly increasing
interest rates. That will make some homeowners think twice about
selling, and many of them will decide to remodel their current
homes instead."
About Zillow
Zillow® is the leading real estate and rental marketplace
dedicated to empowering consumers with data, inspiration and
knowledge around the place they call home, and connecting them with
the best local professionals who can help. In addition, Zillow
operates an industry-leading economics and analytics bureau led by
Zillow's Chief Economist Dr. Svenja
Gudell. Dr. Gudell and her team of economists and data
analysts produce extensive housing data and research covering more
than 450 markets at Zillow Real Estate Research. Zillow also
sponsors the quarterly Zillow Home Price Expectations Survey, which
asks more than 100 leading economists, real estate experts and
investment and market strategists to predict the path of the Zillow
Home Value Index over the next five years. Zillow also sponsors the
bi-annual Zillow Housing Confidence Index (ZHCI) which measures
consumer confidence in local housing markets, both currently and
over time. Launched in 2006, Zillow is owned and operated by Zillow
Group (NASDAQ:Z and ZG), and headquartered in Seattle.
Zillow is a registered trademark of Zillow, Inc.
1 The quarterly Zillow Home Price Expectations Survey is
conducted by Pulsenomics LLC on behalf of Zillow, Inc. This edition
surveyed 107 experts between Nov. 9 and Nov.
19, 2015.
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SOURCE Zillow