Report: Lack of Affordable Options Driving First-Time Homebuyers to Suburbs
Deteriorating housing affordability will drive 2016 housing trends, according to a report released by real estate marketplace Zillow. 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.