Renewed Republican optimism. Fewer Millennials believing homeownership is part of their American Dream. And the Sunshine state, Florida, dominating the housing market’s “to watch” list for 2017. These are just a few items revealed in Trulia’s American Dream Survey, with results published in the company’s annual 2017 Housing Outlook Report.
Renewed Republicans, Depressed Democrats
The outcome of the election left some dismayed and others joyous. It was mired with both optimism and pessimism for consumers’ expectations about the housing market for 2017. Harris Poll conducted two online surveys for Trulia with over 2,000 U.S. adults surveyed once before the presidential election—Oct. 26 to 28—and once after the election— Nov. 15 to 17.
Among the key findings:
- Following the election, Republicans seemed to feel a surge of renewed positivity toward the housing market in 2017, saying it will be a better year to buy a home than in 2016, after the election, experiencing a 26 percentage point swing toward optimism compared to before the election.
- Democrats turned bearish, swinging from a position of optimism before the election to pessimism after; Democrats optimism around buying a home in 2017 fell 23 percentage points.
- For the first time since 2011, fewer Americans viewed homeownership as a part of their American Dream, dropping to 72% this year from 75% last year1. Millennials, aged 18-34, saw the biggest drop, to 72% from 80% over that same time period. However, 83% of these young Americans still plan on buying a home, but most (72%) won’t do so until at least the end of 2018
In addition, as mortgage rates have risen to nearly 4% since the election, renters who wish to buy generally are not concerned about rates stifling their ability to buy a home (18%). Instead, saving for a down payment (59%), having poor credit (38%), and rising home prices (35%) appear to be bigger challenges for home buyers. Moreover, though home inventory is gradually trending upwards in supply-constrained markets, equal or greater growth in demand could push home prices up.
Florida Listed as Top 3 Housing Markets to Watch in 2017
Looking at the 100 largest U.S. metros, Trulia identified 10 real estate markets that are poised for growth based on strong job growth over the past year, low vacancy rates, high affordability, online home searches on Trulia and a large share of Republican households given their optimism for housing in 2017. Based on these key metrics, Florida offers market conditions poised for growth in metro areas across the state, with Jacksonville, Cape Coral-Fort Myers, and Deltona-Daytona Beach taking the top three spots.
The top 10 housing markets to watch in 2017 are:
- Jacksonville, FL
2. Cape Coral – Fort Myers, FL
3. Deltona–Daytona Beach–Ormond Beach, FL
4. Grand Rapids, MI
5. Tampa–St. Petersburg, FL
6. Colorado Springs, CO
7. Charleston, SC
8. San Antonio, TX
9. Phoenix, AZ
10. North Port–Sarasota–Bradenton, FL
Trulia’s Chief Economist Ralph McLaughlin States:
- “While it’s still too soon to tell how President-elect Trump’s surprising presidential victory will affect the housing market, Republicans are feeling a renewed sense of confidence about all things housing in 2017, while Democrats are feeling down. If these contrasts lead to noticeable changes in housing market activity, we think they’ll help close the geographic divide in home price appreciation.
- “Will mortgage rates stifle home buying in 2017? We think not. At present, mortgage rates would have to double nationally for the cost of renting to beat the cost of buying a home. Even with the recent rate hike, homeowners appear to be far more concerned about saving for a down payment, having poor credit, and rising home prices than qualifying for a mortgage.
- “Gradually rising inventory in supply-constrained markets may cause homes to be more affordable, but supply is only half of the story. The combination of a healthy economy and new policies under the Trump Administration could boost demand, driving up the pace of appreciation yet again.”
Trulia is a vibrant home shopping marketplace, focused on giving homebuyers, sellers, and renters the information they need to make better decisions. On mobile and the Web, Trulia provides house hunters with insights and unique information about properties, neighborhoods, and real estate agents. Additionally, Trulia offers data and information about schools, crimes, commute times, and the real estate market. Launched in 2005, Trulia is based in San Francisco and is owned and operated by Zillow Group (NASDAQ: Z and ZG). Trulia is a registered trademark of Trulia, LLC.