- Americans are still keen on homeownership, according to Trulia, but a growing number believe it will be a more difficult milestone to achieve in 2016 than in the past. To try to get a read on the upcoming year’s housing market, Trulia commissioned Harris Poll to conduct an online survey of American housing attitudes. Trulia has also released its housing predictions for 2016.
- The Harris Poll survey found the share of Americans who dream of owning a home is up 1% to 75%, and up 2% for millennials to 80%. In addition, 22% think it will be harder to obtain a mortgage in 2016 than in 2015. Also, of millennials planning to buy a home, 31% want to buy within two years — but jobs and down payments are the barriers.
- Trulia predicted the West and Northeast "costly coast" markets will continue to cool, but the "bargain belt" of the South and Midwest will boom. In areas where multifamily construction has increased, rents should stabilize, Trulia predicted, and nationally, buying will still be a better deal than renting, even with an increase in mortgage rates. In some California markets, however, renting might be cheaper than buying.
In a familiar story, renters report that saving for a down payment is their biggest obstacle to buying a home, followed by credit history, qualifying for a mortgage and rising home prices. Trulia estimated that some of the "pessimism" that "is creeping back into the housing market" might come from anticipation of a looming interest rate hike by the Federal Reserve but added that increased mortgage rates will not outweigh the advantages of buying in most markets.
For millennial renters, it’s essentially the same story, although getting a job promotion or raise for members of this group would also increase their likelihood of purchasing a home. Recent research also indicates that millennials are saddled by student debt and are waiting longer to move out of their parents' homes.
And even though buying a home remains cheaper than renting in many areas of the country, the down payment hurdle is a difficult one to clear. In fact, Zillow predicted that homeownership will be out of reach for the bottom third of earners in 2016.
Trulia also listed its places to watch in 2016, and affordability, job growth and percentage of millennials are the watchwords for this list of markets:
- Grand Rapids–Wyoming, MI
- Charleston, SC
- Austin, TX
- Baton Rouge, LA
- San Antonio, TX
- Colorado Springs, CO
- Columbia, SC
- Riverside–San Bernardino, CA
- Las Vegas, NV
- Tacoma, WA