The New Year is nearly upon us, and a number of housing analysts and firms are prepping their end-of-the-year reports.
Trulia’s report has, historically, been among the more interesting of that batch, and the website’s 2017 Housing Outlook, which surveyed more than 2,000 Americans for their thoughts on the market, continues that holiday tradition in offering numerous insights for agent business.
Here are the five big takeaways from Trulia’s report:
1. Republicans are Lovin’ It – When Trulia first surveyed voters on Oct. 24, Republicans were pessimistic about housing’s future, with all aspects of the housing market receiving negative marks. Things have changed considerably, though, since the election.
In a follow-up survey, Trulia found that Republicans are now overwhelmingly positive on where the market is heading, with sentiments towards buying, selling, getting a mortgage, refinancing and renting all improving considerably; selling a home, for instance, went from a -5 margin (when the percent saying “better” was subtracted from the percent saying “worse”) all the way to +25, a 30-point shift.
2. Blue Blooded – Democrats, meanwhile, have reacted in the exact opposite manner. Selling, for instance, dropped from +13 to just +1; buying dropped from +13 to -10; and attaining a mortgage dropped from +9 to -11. Although it is, of course, inappropriate to ask clients about their political affiliations, Trulia’s numbers have strong implications on how the 2017 market could take shape.
3. The Dream is Fading – In perhaps the most interesting aspect of Trulia’s survey, Americans’ view of homeownership took a dive in 2016, something that has not happened in five years. Seventy-two percent of Americans now consider homeownership part of their American Dream, down from 75 percent last year. The drop was particularly acute for Millennials, who have, since 2013, been more eager about homeownership than the rest of the population. In 2015, 80 percent of Millennials equated homeownership with the American Dream, but after the election, that has fallen to 72 percent.
Also, agents may be waiting on Millennial homeownership just a bit longer – 83 percent of the fledgling generation told Trulia they plan on buying a home, but 72 percent indicated they will not do so until at least the end of 2018.
4. Mortgage Rate Reality – Yes, mortgage rates have risen aggressively since the election, and yes, the 30-year FRM is now at a 2016 high of 4.13 percent. That said, Trulia stressed that mortgage rates would still need to double for owning to become as costly as renting, and that in affordable markets such as Houston and Philadelphia, rates would need to exceed 14 percent.
5. Obstacles to Homeownership – There remain considerable obstacles to consumers contemplating homeownership, and Trulia found that all of them have intensified this year. Saving for a downpayment, having a poor credit history, rising home prices, paying off existing debts – all jumped by several percentage points, with downpayments (at nearly 60 percent) being the biggest concern.