Dive Brief:
- Although the July Zillow Housing Confidence Index is up 0.4 points to a score of 67.3 year-to-date, the real estate website found that sellers are more confident in the market than existing homeowners and renters.
- Less than 65% of existing homeowners surveyed by Zillow believe that now is a good time to buy a home, while 70% of homeowners, particularly those in the West and Southwest, said now is an opportune time to sell.
- In stark contrast to homeowner sentiment, only 38% of renters believe that now is the time to buy, while 50% of renters in hot markets like Seattle, Boston, San Francisco and New York said they are not sure if they will be able to afford a home in the future.
Dive Insight:
Zillow also pointed to a relationship between homeowner and renter attitudes, which is dependent on the particular housing market. In the cities where seller confidence is highest, renters have the least positive outlook.
This "imbalance" between the two groups is a result of high home prices, according to Zillow Chief Economist Svenja Gudell. Homeowners are waiting for prices to keep going up before they sell, and even then, they're worried about being able to find a new home. High prices and fewer homes on the market are pushing renters further from homeownership. Zillow found that the divide between homeowner and renter is largest in Seattle, where both rents and home values have appreciated year over year.
In another Zillow report this month, the company announced that July marked the 48th consecutive month of home price increases — with a 5.1% bump to a Zillow Home Value index of $187,300. Rents also increased 2.2% year over year to a Zillow Rent Index of 1,408. Redfin recently released the results of a survey that found 45% of first-time buyers pointed to rising home prices a driver in their decision to buy, which contradicts conventional industry wisdom that rents are actually keeping first-time buyers from making the move into homeownership, particularly when adding in the burdens of saving for a down payment and student debt.
