Despite a slow and ongoing recovery from the boom and bust of the housing market, consumers are optimistic about what 2015 has to bring. But beware: Barriers remain for homebuyers.
Which real estate activities do consumers think will improve next year? All of them – but especially selling, according to a recent Trulia survey of more than 2,000 American adults.
Roughly 36% said 2015 will be much or a little better than 2014 for selling a home, while just 16% said 2015 will be much or a little worse, a difference of 20 percentage points. The rest of the respondents said next year would be neither better nor worse, or weren’t sure.
Additionally, more consumers said 2015 will be better than 2014 for buying. But the margin over those who said 2015 will be worse was not as wide.
However, barriers remain to homeownership.
“Saving for a down payment is still the highest hurdle, as it was last year, followed by poor credit and qualifying for a mortgage,” Trulia notes.
While not having a stable job has become considerably less of an obstacle — dropping to 24% this year compared with 36% last year — affordability has become a bigger obstacle. Some 32% of respondents cited rising home prices, compared with 22% last year.
In its 2015 housing market outlook, Trulia expects affordability to remain a steep hurdle for homebuyers.
Despite slowing price gains, home-buying affordability will worsen next year for two reasons: Price increases will “almost surely” outpace income growth, and the strengthening economy should push up mortgage rates.
While Trulia points to a strong rental market in 2015, single-family housing starts and new home sales are still not much better than half of normal levels. They’ll improve in 2015, but not as much as consumers would like.
Finally, the vacancy rate for single-family homes is still near its recession high, which discourages new construction. Buyer demand for single-family homes simply hasn’t recovered enough to support near-normal levels of single-family starts or new home sales, Trulia notes.
But some markets show more promise than others. Among them: Boston, Dallas, Nashville, San Diego and Seattle.
Read the full report to learn more.
Written by Emily Study