As affordability worsens near city centers, first-time homebuyers will move to the suburbs in greater numbers, according to 2016 predictions from Zillow.
The Seattle-based real estate and rental marketplace predicts that affordable housing will continue to dry up closer to city centers. Consequently, first-time homebuyers will increasingly turn to suburbs, particularly those with an urban feel and easy access to cities.
Further on the point of affordability, rents will continue to rise in 2016, which Zillow said will create the least affordable median rents recorded. Home values are also expected to rise roughly 3.5% in 2016, meaning that those whose income falls in the bottom third of all incomes will find themselves priced out of homeownership.
“Many potential first-time buyers are living in hot markets where buying a home is really expensive,” Zillow chief economist Svenja Gudell said in a Nov. 30 news release. “In 2016, we’ll start to see more people in hot coastal markets forced to move farther from the core of the city to find housing. When they get there, they’ll be looking for amenity-rich suburbs — mini-cities, with walkable cores and an urban feel.”
Gudell added that the low homeownership should begin to stop falling as quickly as it has, even though the median age of first-time homebuyers is expected to climb to its highest level ever.