Fewer Renters Becoming Homeowners — Here’s What It Means

Fewer Renters Becoming Homeowners — Here’s What It Means Photo (cc) by USDAgov

Homeowners are less optimistic about the future of the housing market despite continuing to feel good about the current state of the market.

That’s according to the latest Zillow Housing Confidence Index, which is based on a survey of 10,000 homeowners and renters across 20 of the nation’s largest metropolitan areas.

Terry Loebs, founder of Pulsenomics — which helped develop the survey — states in a Zillow news release:

“In the eyes of households in 17 of the 20 metropolitan areas, the outlook for the real estate market has dimmed since the start of 2015. … If this downshift in housing expectations persists, it could portend a longer period of price deceleration and more sluggish consumer spending than some people are currently expecting.”

In the latest survey, administered in July, the percentage of renters who said they planned to buy a home in the next year was 11.4 percent. That was down from 12.1 percent in the January survey.

Additionally, 59 percent of survey participants said they believed people who recently bought a home would be better off in 10 years. That was down from 61 percent in the prior survey.

Svenja Gudell, Zillow’s chief economist, explains:

“The housing market is slowing down, and Americans’ confidence in the future of the market is understandably fading a bit, too. … But the good news is things are leveling off with no crash in sight. If incomes rise to keep up with home values — and that’s a big if — people can count on homeownership in their future, even in hot markets.”

Another “big if” that could impact the housing market, CBS News reports, is whether the Federal Reserve will increase interest rates this year, which could prompt current, near-record-low mortgage rates to start inching up.

The Federal Reserve board meets Sept. 16-17.

According to the Zillow Housing Confidence Index, of the 20 markets included in the survey, overall housing confidence was highest in these 10 markets:

  • San Jose, California
  • Seattle
  • Denver
  • Phoenix
  • Miami
  • Washington, D.C.
  • San Francisco
  • Los Angeles
  • Las Vegas
  • Dallas

Do you think homeowners or renters are better off in the current housing market? Let us know below or on Facebook.

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