Taylor Scott International News
Deteriorating housing affordability will the main drive factor of residential property trends in the United States in 2016, according to a new analysis report. A lack of affordable homes near city centres will push new and first time buyers to suburbs that feel like walkable, amenity rich mini-cities, says the study from real estate form Zillow. It also explains that 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 report says that the median age of first time buyers will reach new highs in 2016 as millennials put off home ownership 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 home ownership and unable to afford even the least expensive homes on the market, it suggests. 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, the report also predicts. As affordable housing close to city centres 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 Survey suggests that home values are set to grow about 3.5% in 2016. ‘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,’ said Zillow chief economist Svenja Gudell. ‘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 like mini cities, with walkable cores and an urban feel,’ she explained. ‘As renters gradually transition into homeowners, the historically low home ownership rate should stop falling quite as quickly as it has been. However, the median age of first time buyers, 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,’ she pointed out. ‘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,’ she concluded. Taylor Scott International
Taylor Scott International, Taylor Scott
