Skip to main content

High Rents Serving as Roadblocks to Increasing Homeownership Rate

NationalMortgageProfessional.com
Feb 13, 2015

Unaffordable rents are making it hard for people to save for downpayments, and they aren't likely to ease up for at least two years, according to the latest Zillow Home Price Expectations Survey sponsored by Zillow Inc. and conducted quarterly by Pulsenomics LLC. More than half (52 percent) of the respondents with an opinion on this issue said the market will correct the nation's soaring rents over time, and no government intervention is required. About one-third (35 percent) of respondents said rising rents are not a problem.

"Solving the rental affordability crisis in this country will require a lot of innovative thinking and hard work, and that has to start at the local level, not the federal level," said Zillow Chief Economist Dr. Stan Humphries. "Housing markets in general and rental dynamics in particular are uniquely local and demand local, market-driven policies. Uncle Sam can certainly do a lot, but I worry we've become too accustomed to automatically seeking federal assistance for housing issues big and small, instead of trusting markets to correct themselves and without waiting to see the impact of decisions made at a local level. Broader federal efforts aimed at increasing real wages and job opportunities will go a long way toward helping renters, but real, lasting solutions to rising rents need to be found locally."

The survey also asked panelists about President Obama's announcement last month aimed at helping middle-class homebuyers through a reduction in FHA mortgage insurance premiums.

Two-thirds (66 percent) of survey respondents with an opinion said they think the changes will be "somewhat effective in making homeownership more accessible and affordable," but almost half (49 percent) said the new initiatives are unwise, unnecessary and potentially risky for taxpayers.

The panelists predicted U.S. home values will rise 4.4 percent in 2015, to a median value of $187,040. The most optimistic forecasted a 5.5 percent increase, while the least optimistic projected a 3.1 percent increase. On average, panelists said they expect median U.S. home values to exceed their pre-recession peak of $196,400 by May 2017.

"During the past year, expectations for annual home value appreciation over the long run have remained flat, despite lower mortgage rates," said Terry Loebs, founder of Pulsenomics. "Regarding the near-term outlook, there is a clear consensus among the experts that the positive momentum in U.S. home prices will continue to slow this year. At 4.4 percent, overall expectations for nationwide home value growth in 2015 are one-third lower than the actual 6.6 percent appreciation rate recorded last year."

Published
Feb 13, 2015
400 Mortgage Loan Originators Caught Trying To Skip School

400 mortgage loan originators nationwide deceptively claimed to have completed their annual continuing education as required by state and federal law.

Industry News
Jan 19, 2022
Infamous Better.com CEO Is Back And Employees Are Upset

After a month-long hiatus or “break” as Garg likes to call it, the CEO is back at the helm of the company.

Industry News
Jan 19, 2022
Capacity Closes $38M In Series C Funding, Surpasses $62M In Total Capital Raised

AI-powered automation platform, Capacity, announced an additional $27 million in Series C funding, closing out the round at more than $38 million.

Tech
Jan 19, 2022
Millennials Are Still Powering The Housing Market

First American Financial Corporation's Potential Home Sales Model for Dec. 2021 revealed that millennial demand is propelling the housing market, thanks to low rates and increased geographic flexibility.

Analysis and Data
Jan 19, 2022
Open Mortgage Adds A Chief Revenue Officer

Scott Harkless will spearhead all wholesale and retail sales functions for the national multi-channel mortgage lender.

Industry News
Jan 19, 2022
Home Builder Confidence Dips Due To Inflation And Supply Chain Concerns

Home builder confidence in the market for newly built, single-family homes fell by one point to 83 in January 2022, according to the National Association of Home Builders and Wells Fargo's Housing Market Index report.

Construction
Jan 18, 2022