Homeownership rates will rise across the nation in 2017 after years of declines as more millennials enter the market, Zillow predicted Tuesday in its look-ahead report.
But, the Southern California market is not expected to see the same gains experienced in the rest of the country because of a lack of inventory and other factors, the home listing website said.
“It’s not as likely . . . and not as obvious in the SoCal area. I’m more hesitant to say you’ll see a tremendous increase in the homeownership rate,” said Svenja Gudell, Zillow’s chief economist. “You could see a small uptick, but it’s not a given.”
She said if more inventory comes on the market, there is a chance Southern California could see a bump in homeownership. But, Gudell said it also depends on job and income growth.
The national homeownership rate was 63.5 percent in the third quarter of 2016, said the U.S. Census’ Housing Vacancies and Homeownership estimate. At the same time in San Diego County, the rate was 54.4 percent.
Zillow’s report predicted national home values to rise 3.6 percent next year. In San Diego County values will rise 2.1 percent.
Gudell said mortgage rates will be a major factor in slowing value growth, and it is more extreme in San Diego County where home prices outpace much of the rest of the nation. The higher costs mean substantially more money based on interest rate changes.
Zillow’s rental prices for San Diego County are up 5 percent so far this year. The website predicts rents will rise 4 percent in 2017, again bucking the national trend of more substantial reductions.
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