Millions of American renters want to buy a home in 2014, particularly those who live in areas hit hardest by the housing crisis, according to the Zillow Housing Confidence Index. While the desire to buy is high, there aren’t enough homes to go around.
There were 2.1 million sales to first-time homebuyers in 2013. If the 10% of renters who want to buy a home this year are able to, that figure would double to roughly 4.2 million home sales to first-time buyers. Even if those millions of aspiring homeowners had the means and credit standing to qualify for mortgages (and most of them feel they could afford it), the market conditions also need to play in their favor in order for them to realize their dreams.
One of the biggest barriers to homeownership is the availability of houses. Inventory is up 11.1% from last year, according to Zillow, but it has declined in eight of the 20 metropolitan areas studied for the housing confidence index.
Available homes also need to be affordable. Mortgage rates are at about 4.2%, which is historically low but well above last year’s lows of about 3.3%.
The desire to move from renter to owner is highest among Miami, Atlanta and Las Vegas residents. According to February foreclosure report from housing data provider RealtyTrac, Miami and Atlanta maintain some of the highest foreclosure rates among U.S. metro areas, which could actually be good news for first-time buyers looking for less-expensive property. At the end of 2013, Atlanta had one of the best foreclosure discounts at 57%, according to RealtyTrac.
The Zillow Housing Confidence Index is a new metric measured on a 0 to 100 scale, with readings above 50 considered positive. Nationwide, the confidence index was 63.7 at the start of the year, and 11 metro areas had a higher confidence index than the national standing. Among those highly confident metro areas are San Diego and Dallas, which each registered a 12.3% decline in available homes.
As the nation warms up to the recovering housing market and renters look to buy, their ability to act on their aspirations remains a challenge.
More on Mortgages and Homebuying:
- Why You Should Check Your Credit Before Buying a Home
- How to Find & Choose a Mortgage Lender
- How to Refinance Your Home Loan With Bad Credit
- How to Get Pre-Approved for a Mortgage
- How to Get a Loan Fully Approved
- How to Search for Your Next Home